The function of authority in transaction cost economics

The new institutional economics and development theory: A brief critical assessment

“…But at the same time we should not ignore, as Dow (1987) points out, that such discretionary control, along with hierarchy and the division of labor, generates the structural preconditions for "employer opportunism. "…”

Division of labor, organizational coordination and market mechanisms in collective problem-solving

“…Let us just mention three major difficulties of the theory which are crucial for the argument which follows (for a broader critical appraisal of transaction costs theory cf., for instance, Granovetter (1985) and Dow (1987)). …”

The choice of organizational form: Vertical financial ownership versus other methods of vertical integration

“…The firm has better control of opportunistic behavior due to the authority relationship (Dow, 1987) Grossman and Hart (1986), the auditing powers of the firm are superior to the auditing capabilities of contracting parties (Williamson, 1975 (Chandler, 1977 (Eisenhardt, 1985;Ouchi, 1980 (Grossman & Hart, 1986), incentives change, and governance structures (ability to monitor and reward) change (Williamson, 1985 The loss of high powered market incentives suggests that internal organization may also be more costly than the market mechanism (Williamson, 1985), undercutting the profit incentive for integration. One explanation is that the lack of direct competitive pressures on the cost of the intermediate products may allow increasing levels of slack (Cyert & March, 1963) (Harrigan, 1985c).…”