Welcome to Encycogov
What is corporate governance?
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Key topics
 The big picture
 Stock price formation
 Fundamental value analysis
International corp. governance

Incentive mechanisms
 Decision system
Performance monitoring
 Incentive based compensation
 Bankruptcy system
 Ownership structure
 Creditor structure
 Capital structure
 Market for corporate control
Labor market competition
Product market competition

Related topics
Transaction cost economics
 Positive economics



Transaction cost economics

Introduction: This page is the main page for information about the research tradition of transaction cost economics (TCE) initiated by Williamson [1975, 1985]. Transaction cost economics has no particular connection with corporate governance. Indeed, as an analytical tool it is mostly used to explain economic problems where asset specificity plays the key role. This is not the case with most problems in corporate governance where the most crucial environment factor is asymmetric information between the manager and the principals to the manager, for instance, the owners or the creditors of the firm. Nevertheless, the methodological framework of transaction cost economics offer many insights to the study of corporate governance and for that reason it has got a section of its own on Encycogov.


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