Transaction Cost Economics: What Are the Questions?
Abstract: This paper contrasts the curiosity style for doing social science research that asks the question “What is going on here?” with the more confident research approach that pronounces “This is the law here!” Inasmuch as the social sciences are much more complex than the physical sciences, there is much to be said for the former in our studies of institutions – although, in the spirit of pluralism, there is room for and (as a part of the “natural progression”) a need for both. I begin with an anecdote on the merits of asking good questions, then summarize the period 1930-1970 as it relates to the development of Transaction Cost Economics, then summarize the sequence of events by which TCE has taken shape since – to include questions posed by refinements and extensions and unmet needs.
