DEFINITION of Oliver E. Williamson
Oliver E. Williamson is an American economist who became the recipient of the Nobel Prize in Economics in 2009. Sharing the award with Elinor Ostrom, Williamson was honored for "his analysis of economic governance, especially the boundaries of the firm." Williamson has taught throughout the world and is currently a tenured professor emeritus of business, economics, and law at the University of California, Berkeley. Williamson has been a groundbreaking researcher in organizational economics and transaction-cost economics.
BREAKING DOWN Oliver E. Williamson
Born in Wisconsin in 1932, Williamson has also taught at the University of Pennsylvania and Yale. He received his BS in business administration from the Massachusetts Institute of Technology, and he holds an MBA from Stanford and a Ph.D. in economics from Carnegie Mellon. He has received numerous awards, honors, and fellowships.
In 1999, as a Fulbright Distinguished Chair, he taught economics at the University of Siena. He also holds honorary degrees from a host of economics departments worldwide, including Nice University in France, the University of Chile, the Copenhagen Business School, and St. Petersberg University.
In his work with transaction cost analysis, Williamson illustrated the high theoretical differences between a one-time transaction between two parties in a contract and the evolution of that contract over time with subsequent transactions. When these transactions and their value are dependent on a relationship of two parties in the private sector, Williamson also expanded his models to include the differences in transactional cost impact between the private sector and the public sector, showing the differences between the two sectors and how the relationship changes over time and with different transactions.
Williamson also invented the term "information impactedness," a term which is defined as “A characteristic of transactions in which the parties to a contract are inclined to operate opportunistically in the presence of uncertainty and complexity surrounding the contract.”
Though best known for his contributions to “the theory of the firm” as a basic unit of economic organization, Williamson also wrote five books prior to receiving his Nobel Award. In order of release, they are: Markets and Hierarchies: Analysis and Antitrust Implications, 1975, The Economic Institutions of Capitalism, 1985, The Nature of the Firm: Origins, Evolution, and Development (co-edited with Sidney Winter), 1991, The Mechanisms of Governance, 1996, and Industrial Organization, 1996