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Williamson (1991) - Comparative Economic Organization The Analysis Of Discrete Structural Alternatives (view source)
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{{Article
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|Has article title=Comparative Economic Organization The Analysis Of Discrete Structural Alternatives
|Has author=Williamson
|Has year=1991
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*This page is referenced in [[BPP Field Exam Papers]]
Williamson, Oliver (1991), "Comparative Economic Organization: The Analysis of Discrete Structural Alternatives", Administrative Science Quarterly, Vol. 36, No. 2. pp. 269-296 [http://www.edegan.com/pdfs/Williamson%20(1991)%20-%20Comparative%20Economic%20Organization%20The%20Analysis%20of%20Discrete%20Structural%20Alternatives.pdf pdf]
@article{williamson1991comparative,
title={Comparative economic organization: The analysis of discrete structural alternatives},
author={Williamson, O.E.},
journal={Administrative science quarterly},
pages={269--296},
year={1991},
publisher={JSTOR}
}
==Abstract==
Williamson again puts forward forms of contract law:
*Classical Contract Law (covered in [[Williamson (1979) - Transaction Cost Economics | Williamson (1979)]])
*NeoClassical Contract Law (new material covered below)
Arbitration is very costly, and the range of disturbances it can support is limited. As disturbances get very large, this framework is no longer optimal.
==Forebearance==
===Adaptation===
Economic problems arise as a consequence of change. The price system is an efficient mechanism (in the market) for communicating information and inducing change (Hayek 1945). However, firms also adapt to change (Barnard 1938), and concious, deliberate, and purposeful cooperation is realized through formal organization (firms). When the price is a sufficient statistic, then the market excels. The sort of adaptation that are supported through price signals are autonomous (<math>A\,</math>) changes. However, some disturbances require coordinated (in later papers refered to as cooperative) responses, lest the components operate at cross purposes. These are <math>C\,</math> changes. Problems in addressing <math>C \,</math> changes include:
*If one party coordinates, then they may use their position strategically for their own gain
**They may distort information, or disclose it selectively or incompletely.
*Maladaption itself is costly.
Fiat has advantages for <math>C\,</math> changes.
===Instruments===
be redeployed to alternative uses and by alternative users
without sacrifice of productive value.
-Williamson, 19991991
Six distinctions are made:
#Temporal specificity - technological non-seperability (e.g. timely response of humans)
The first five forms (in particular) create bilateral dependency.
===Alignment===
==Comparative statics===
Noting that the choices are discrete, the paper provides some 'comparative statics' with respect to property rights, expropriation, contract law, reputation effects and uncertainty.
