Dixit versus Williamson: the ‘fundamental transformation’ reconsidered

Abstract

Comparing the literature on hold-up and strategic entry deterrence leads to a puzzling role for sunk or specific investments in affecting investor’s incentive. In one case, non-redeployable investments decrease investor’s ex-post bargaining power. In the other they increase it. When the entry deterrence effect is acknowl- edged, the threat of hold-up against investor is largely weakened. Contrary to pre- vious literature, in this respect, asset specificity may even constitute an endogenous enforcement device for incomplete contracts. We conclude that the impact of asset specificity on investor’s post-contractual power, far from being general, depends on the nature of interactions between contractual arrangements and market structure

Strategy to Build a Transshipment Port as a Catalyst to Achieving Critical Mass for Sabah’s Economic Growth

“…The researcher argued that the purchasing policy depends on the practices of the organization. In contrast, the proposed model by Nicita & Vatiero (2014) showed that the transactional cost depends on the nature of the organization in terms of whether it is private or public. Private organizations are seen to be good in internal development while public organizations mainly outsource products.…”

“…The researcher notes that an organization"s decisions on whether to produce internally or outsource their production are influenced by how controlling their government is or is not. Figure 12 showed that Nicita & Vatiero (2014) have also proposed their own model to study the factors affecting TCE theory. These include administrative regulations, the nature of the organization, market safeguards, and the nature of commodities.…”

“…Similarly, proposed models by Popov (2014) and Nicita & Vatiero (2014) are that they have both considered the administration and regulations as factors that explain the transactional cost and method used to regulate transactional costs. Both researchers agreed that the governance and policies of an organization stipulate whether an organization should outsource or make products internally.…”

A regulation and transaction cost perspective on the design of corporate law

“…In other words, how to reduce the costs of future disturbances in the relations between the firm and its contractual partners is emphasized. Safeguards that align incentives, are often devised by the contractual parties themselves (Williamson 1988(Williamson , 2002Nicita and Vatiero 2014). In accordance with transaction cost economics, we discuss how corporate law can help the firm with contractual solutions that reduce future contractual problems.…”

Transaction cost theory - explaining entry mode choices

“…Although Williamson stressed that transaction frequency should be considered as a vital organisational determinant, numerous researchers tend to overlook this dimension whilst conducting entry mode studies [see e.g. Dietrich 1994;Bremen et al 2010;Nicita & Vatiero 2011].…”