Station and Foundations of Transaction Cost Economics



Transaction Cost Economics (TCE), as a subset of New Institutional Economics (NIE), is the combination of Economics, Organization and Law. Noble Prize in 2009 was dedicated to Oliver Williamson who was the most popular face in the Economics as TCE main Contributor. In TCE, the main issues on the one hand is how institutions follow Characteristics of Transactions, On the other hand, the making or buying decision or Vertical Integration is one of the focal question in TCE. For Operationalization of this question, TCE use The Discriminating Alignment Hypothesis. Base on this Hypothesis, governance structure aligns with characteristics of transaction subject to transactions costs minimization. In these perspectives, TCE reveals the proper answer to need of managers for make or buy decisions. So cognition of Station and foundations of TCE, with the consideration of its wide applications as interdisciplinary science in recent years, is the purposes of this article.
JEL Classification: D23; L22; L24