The Williamsonian Ambiguity on Authority and Power in Transaction Cost Economics. Issue 1 (2nd January 2019)

• Record Type: Journal Article
• Authors: Baudry, Bernard; Chassagnon, Virgile
• Is Part Of: Journal of economic issues. Volume 53:Issue 1(2019)
• Page Start: 257
• Page End: 276
• Publication Date: 2019-01-02
• Subjects: authority -- economic methodology -- power -- theory of the firm -- transaction cost economics; B40 -- D23 -- L00; Economics -- Periodicals; Economics; Économie politique -- Périodiques; Economie; ECONOMICS; ECONOMIC POLICY; Periodicals; 330.05
• DOI: 10.1080/00213624.2019.1573094
• Languages: English
• ISSNs: 0021-3624

Abstract

Abstract: Power has traditionally been rejected from economics and more particularly from the economics of the firm. Although he proposes building an interdisciplinary approach to the firm, Williamson rejects power from the economics of transaction costs. However, regarding the theoretical and behavioral hypotheses he makes, we can raise the following question: does the Williamsonian approach to the firm have intrinsic properties for developing a theory of power? After analyzing Williamson's argument on power/authority, this paper aims to shed light on the fact that the2009 Nobel Prize winner has built a theory based on power that he rejects due to a questionable methodological choice. Conversely, we defend the thesis according to which power cannot be removed from the economics of the firm and transaction cost economics–at the risk of providing a distorted picture of the reality of capitalism.