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Nobel to Ostrom and Williamson
TRUTH ON THE MARKET — ... of the firm, and work that has been important for law and economics generally is a wonderful development.  However, I will admit a non-trivial amount of disappointment that the prize for economic governance of institutions was not shared by any of the UCLA trio Alchian, Demsetz or Klein , who contributed a significant amount to the literature on the boundaries of the firm, asset specificity, and transaction costs. Alex Tabarrok has helpful summaries on Ostrom and Williamson . I also note that, per this comment , Geoff owes me lunch at Five Guys.

2009 Nobel Prizes
Aguanomics — ... than the theoretical financial and macroeconomics that gave intellectual support to the idiots who played big roles in the global economic disaster that has hurt so many people; see this post and this post Bottom Line: Ostrom and Williamson deserve the Nobel for doing the best kind of economics -- the economics that enlightens us and gives us ways to improve our lives. Addendum: Lynne Kiesling, Alex Tabarrok (Ostrom) (Williamson) and Tim Haab on the prize. ...

Explaining Oliver Williamson
EconLog: Library of Economics and Liberty — I think Alex Tabarrok is the most helpful of the bloggers thus far. Lynne Kiesling is helpful on Williamson as well as on Elinor Ostrom, the other new Nobel Laureate. I think of Oliver Williamson in terms of the 1980's personal computer industry, featuring IBM, Microsoft, and Apple. Apple integrated the hardware and operating system. IBM and Microsoft had an arms-length relationship. From Williamson's perspective, Apple needed a software company to make a strategic investment in developing an operating system for its hardware. Not having a long-term track record, the ...

Oliver Williamson and Elinor Ostrom Awarded Nobel in Economics
Economist's View — ... by central authorities or privatized. Based on numerous studies of user-managed fish stocks, pastures, woods, lakes, and groundwater basins, Ostrom concludes that the outcomes are, more often than not, better than predicted by standard theories.” Mr. Williamson’s research, the committee said, found that “when market competition is limited, firms are better suited for conflict resolution than markets.” ... See also: Paul Krugman, Marginal Revolution 1, Marginal Revolution 2, Arnold Kling, ...

Tuesday links: cost cut cascade
Abnormal Returns — ... earmarks and Goldman Sachs to boot!  (Green Sheet) A review of Michael Mauboussin’s Think Twice.  (Aleph Blog) What do the 2009 Nobel prize winners in Economics say about the future of economics?  (Felix Salmon, Real Time Economics, Economix, Economist, Freakonomics, Marginal Revolution, Crooked Timber, Daniel ...

Williamson Miscellany, Continued
Organizations and Markets — ... | Peter Klein | 5. Many useful summaries of Williamson’s (and Ostrom’s) contributions are appearing online, such as those by David Henderson, John Nye, Jeff Ely, and Alex Tabarrok. I think the first few pages of my “make-or-buy” chapter in the NIE Handbook are good for this too. I also have some slides on transaction cost economics (part 1, part 2) that may be helpful for those seeking more detail. 6. Joshua Gans credits me with anticipating the award, which is nice, but ...

Identify the Invisible Hand!
Angry Bear — ... Alex Tabarrok writes on the Nobel Prize for Oliver Williamson in an article on the Marginal Revolution Blog “Oliver Williamson and the pin factory”, which is fine but it contains the following paragraph: ...

Vertical integration, cell phone edition
SCSUScholars — ... . There was some thinking about this last week with Oliver Williamson's Nobel win (see Alex Tabarrok for example.) Since it appears each carrier gets its own flavor of phone that the arrangement reduces some scale economies for phone manufacturers. Why? I don't have a good answer here. ...