Vertical Integration as Paradigm: A graphical representation of TCE

Technical Notes

May 25, 2010 — Neil Boyle

VERTICAL INTEGRATION AS PARADIGM – A graphical representation of TCE 5-25-2010
One of many amazing accomplishments of Professor Williamson and to which we benefit from today was his extraction in reduced mathematical form (1996. pp. 106-111) of the basic structure of economic exchange.  Notwithstanding reduced form mathematics, we can generate new descriptions of infrastructure transactions, deduce many of its unobservable properties and penetrate deeper into the microanalytic world of infrastructure goverance; witness this website.  Embedded knowledge now permits, for the first time, scientific experimentation as means to further extend our knowledge of this valuable investment form.  Fully formal mathematical work is in-progress and Williamson’s research continues in the slow, molecular and empirical fashion it has since the beginning of studies in the 1970s.  Why is even reduced form mathematics important in the understanding of infrastructure governance? There are many reasons, but the one that stands out has to do with motion, not motion in the physical displacement sense, but motion in the sense of pointing cost effectively toward the next workable increment of explanation.
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