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Taking coase seriously
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DOI：10.2307/2667034.png)
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Abstract
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In this essay I advance two related theses. First, economic theory predicts that organizations will be a mess but not a mystery. Second, classic case studies conducted by organizational sociologists support this prediction. Fully articulating and defending these theses will require a book, so my goal here is simply to render them plausible. I begin by pointing toward the relevant economic theory and sociological evidence, but I devote the bulk of the essay to a particular example: I develop a formal economic model inspired by a passage from Michel Crozier's The Bureaucratic Phenomenon. I conclude by discussing the potential roles of formal economic modeling in organizational research.*
Keywords:
MORAL HAZARD
MARKET
ORGANIZATIONS
INSTITUTIONS
HYPOTHESIS
MODEL
FIRM
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