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Oliver E. Williamson

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Oliver E. Williamson
Williamson in 2009
Born
Oliver Eaton Williamson

(1932-09-27)September 27, 1932
Superior, Wisconsin,U.S.
DiedMay 21, 2020(2020-05-21)(aged 87)
Berkeley, California,U.S.
NationalityAmerican
EducationMassachusetts Institute of Technology(BS)
Stanford University(MBA)
Carnegie Mellon University(PhD)
Academic career
InstitutionUniversity of California, Berkeley
Yale University
University of Pennsylvania
FieldMicroeconomics
School or
tradition		New Institutional Economics
InfluencesKenneth Arrow
Chester Barnard
Ronald Coase
Richard Cyert
Friedrich Hayek
Ian Roderick Macneil
Herbert A. Simon
John R. Commons
AwardsJohn von Neumann Award(1999) Nobel Memorial Prize in Economic Sciences(2009)
InformationatIDEAS / RePEc
Academic background
ThesisThe economics of discretionary behavior: nonpecuniary objectives in the theory of the firm(1963)

Oliver Eaton Williamson(September 27, 1932 – May 21, 2020) was an Americaneconomist,a professor at theUniversity of California, Berkeley,and recipient of the 2009Nobel Memorial Prize in Economic Sciences,which he shared withElinor Ostrom.[1]

His contributions totransaction cost economicsand thetheory of the firmhave been influential in thesocial sciences,[2][3][4]law and economics. Williamson described his work as "a blend of soft social science and abstract economic theory".[5]

Life and career[edit]

Oliver "Olly"[4]Williamson was born inSuperior, Wisconsin,on 27 September 1932.[4]He was the son of Sara Lucille (Dunn) and Scott Williamson, both of whom were high school teachers.[4]As a child, Williamson attendedCentral High Schoolin Superior.[6]

Williamson’s dual enrollment between Ripon College and MIT[4]earned him his bachelor’s degree in management from theMIT Sloan School of Managementin 1955. During his time in his undergraduate academic career, his studies in engineering sparked his initial interest in transaction costs.[4]After graduating, he worked as a project engineer for General Electric, as well as the Central Intelligence Agency.[4]

Williamson received anMBAfromStanford Universityin 1960, and hisPhDfromCarnegie Mellon University,formerly Carnegie Tech,[4]in 1963. His dissertation was titled ‘The Economics of Discretionary Behaviour: Managerial Objectives in a Theory of the Firm’.[4]A student ofRonald Coase,Herbert A. SimonandRichard Cyert,he specialized intransaction costeconomics.

From 1963 to 1965 he was an Assistant Professor of Economics at the University of California, Berkeley. From 1965 to 1983 he was a professor at theUniversity of Pennsylvaniaand from 1983 to 1988, a Gordon B. Tweedy Professor ofEconomics of Lawand Organization atYale University.While at Yale, Williamson was a founder ofThe Journal of Law, Economics, & Organization.He held professorships in business administration, economics, and law at theUniversity of California, Berkeleysince 1988 and was theEdgar F. KaiserProfessor Emeritus at theHaas School of Business.[7]As aFulbright Distinguished Chair,in 1999 he taught Economics at theUniversity of Siena.

Found to be one of the most cited authors in the social sciences,[8]in 2009, he was awarded theNobel Memorial Prize in Economicsfor "his analysis of economic governance, especially the boundaries of the firm",[9]sharing it withElinor Ostrom.Williamson died on May 21, 2020, in Berkeley, California.[10][11]

Theory[edit]

By drawing attention at a high theoretical level to equivalences and differences between market and non-market decision-making, management and service provision, Williamson was influential in the 1980s and 1990s debates on the boundaries between thepublicandprivate sectors.

His focus on the costs of transactions led Williamson to distinguish between repeated case-by-case bargaining on the one hand and relationship-specific contracts on the other. For example, the repeated purchasing of coal from aspot marketto meet the daily or weekly needs of anelectric utilitywould represent case-by-case bargaining. But over time, the utility is likely to form ongoing relationships with a specific supplier, and the economics of the relationship-specific dealings will be importantly different, he argued.

Other economists have tested Williamson's transaction-cost theories in empirical contexts. One important example is a paper byPaul L. Joskow,"ContractDuration and Relationship-Specific Investments: Empirical Evidence fromCoalMarkets",inAmerican Economic Review,March 1987. Theincomplete contractsapproach to thetheory of the firmandcorporate financeis partly based on the work of Williamson and Coase.[12]

Williamson was credited with the development of the term "information impactedness", which applies in situations of unequal access to information.[13]As he explained inMarkets and Hierarchies,it exists "mainly because of uncertainty andopportunism,thoughbounded rationalityis involved as well. It exists when true underlying circumstances relevant to the transaction, or related set of transactions, are known to one or more parties but cannot be costlessly discerned by or displayed for others ". Thus, Williamson is to be counted among those who have taken issue with the view that the firm is another type of market, characterized by a nexus of contracts. In his own words:" But to regard the corporation only as a nexus of contracts misses much of what is truly distinctive about this mode of governance ".[14][15]

Nobel Memorial Prize in Economic Sciences[edit]

Williamson's pipe holder on display at theNobel Prize Museum

In 2009, theRoyal Swedish Academy of Sciencescited Williamson andElinor Ostromto share the 10-millionSwedish kronor(£910,000; $1.44 million) prize "for his analysis of economic governance, especially the boundaries of the firm".[1]Williamson, in the BBC's paraphrase of the academy's reasoning, "developed a theory where business firms served as structures for conflict resolution".[16]

Oliver E. Williamson and Elinor Ostrom at the 2009 Nobel Prize Press Conference.

Personal life[edit]

He met his wife Dolores Celini in 1957, while they both lived in Washington, D.C.[4]They had five children.[4]

Awards and fellowships[edit]

Legacy[edit]

For his dedication to the field and his service to the institution, the Haas School of Business at Berkeley established the Williamson Award[4]in honor of Oliver Williamson. This prestigious award is presented to outstanding faculty members who embody Berkeley's four Defining Leadership Principles - Question the Status Quo, Confidence Without Attitude, Students Always, and Beyond Yourself.[17]Beginning in fiscal year 2013, the Williamson Award has been presented to the following faculty members:

Selected papers[edit]

  • Oliver E. Williamson (1981)."The Economics of Organization: The Transaction Cost Approach"(PDF).The American Journal of Sociology.87(3): 548–577.doi:10.1086/227496.S2CID154070008.Archived fromthe original(PDF)on 2009-05-30.Retrieved2012-01-11.
  • Oliver E. Williamson (2002)."The Theory of the Firm as Governance Structure: From Choice to Contract".Journal of Economic Perspectives.16(3): 171–195.doi:10.1257/089533002760278776.JSTOR3216956.

Books[edit]

See also[edit]

References[edit]

  1. ^abOliver E. Williamsonon Nobelprize.orgEdit this at Wikidata,accessed 11 October 2020
  2. ^Mahoney, Joseph T.; Nickerson, Jackson (2021)."Oliver Williamson: a Hero's journey on the merits".Journal of Institutional Economics.18(2): 195–207.doi:10.1017/S1744137421000151.ISSN1744-1374.S2CID233655198.
  3. ^Argyres, Nicholas; Zenger, Todd (2021)."Oliver Williamson and the strategic theory of the firm".Journal of Institutional Economics.18(2): 209–217.doi:10.1017/S1744137421000539.ISSN1744-1374.S2CID237835868.
  4. ^abcdefghijklSent, Esther-Mirjam; Kroese, Annelie L. J. (2021)."Commemorating Oliver Williamson, a founding father of transaction cost economics".Journal of Institutional Economics.18(2): 181–193.doi:10.1017/S1744137421000606.ISSN1744-1374.
  5. ^Maclay, K.,UC Berkeley's Oliver Williamson shares Nobel Prize in economics,Haas Newsroom,published 12 October 2009, archived 11 April 2010, accessed 6 July 2023
  6. ^"Five Individuals, 1952 Cathedral Football Team Among 2010 HOF Inductees".Superior Telegram. February 11, 2010.
  7. ^"Curriculum Vitae of Oliver E. Williamson"(PDF).University of California, Berkeley. Archived fromthe original(PDF)on 2015-06-11.Retrieved2009-10-17.
  8. ^Pessali, Huascar F. (2006). "The rhetoric of Oliver Williamson's transaction cost economics".Journal of Institutional Economics.2(1): 45–65.doi:10.1017/S1744137405000238.ISSN1744-1382.S2CID59432864.
  9. ^Sveriges Riksbank's Prize in Economic Sciences in Memory of Alfred Nobel 2009.Sveriges Riksbank. 12 October 2009. Archived fromthe originalon 17 October 2009.Retrieved2009-10-12..
  10. ^"Nobel laureate Oliver Williamson, pioneer of organizational economics, dies at 87".23 May 2020.
  11. ^"The Passing of Oliver Williamson | SIOE".sioe.org.Retrieved2020-05-23.
  12. ^Hart, Oliver,(1995),Firms, Contracts, and Financial Structure.Oxford University Press,ISBN0-19-828881-6.
  13. ^Williamson, O.,Markets and Hierarchies: Some Elementary Considerations,The American Economic Review,May 1973, Vol. 63, No. 2, Papers and Proceedings of the Eighty-fifth Annual Meeting of the American Economic Association, pp. 316-325, accessed 13 February 2023
  14. ^Williamson, Oliver E. (1991)."Comparative Economic Organization: The Analysis of Discrete Structural Alternatives".Administrative Science Quarterly.36(2): 269–296.doi:10.2307/2393356.ISSN0001-8392.JSTOR2393356.S2CID17863124.
  15. ^Agafonow, Alejandro; Perez, Marybel (2020), Neesham, Cristina (ed.),"Discoveries in the Science of Organizational Economics: From the Province of Genius to the Province of Reason",Handbook of Philosophy of Management,Handbooks in Philosophy, Cham: Springer International Publishing, pp. 1–21,doi:10.1007/978-3-319-48352-8_43-2,ISBN978-3-319-48352-8,S2CID242329591,retrieved2021-10-27
  16. ^Special Issue ofJournal of Retailingin Honor of The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2009 to Oliver E. Williamson, Volume 86, Issue 3, pp. 209–290 (September 2010). Edited byArne NygaardandRobert Dahlstrom
  17. ^"The Williamson Award".Berkeley Haas.RetrievedNovember 21,2023.

External links[edit]

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Awards
Preceded by Laureate of the Nobel Memorial Prize in Economics
2009
Served alongside:Elinor Ostrom 		Succeeded by
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