Metaphors of Transaction Cost Economics

Abstract

Abstract: Metaphors are part of our daily lives as they help us understand the world and economics, as other areas of knowledge, cannot go without metaphors. Transaction Cost Economics (TCE) is no different to other intellectual construction and has been built on a set of key metaphors. This article discusses three of these metaphors: transaction costs as frictions, human beings as “contractual men, ” and natural selection between mechanisms of governance. It scrutinises their potential to help Williamson’s theory gain adherence from and be recognised as relevant by his peers. It discusses some possibilities of how the initial choice or formulation of key TCE metaphors may mould intellectual exchanges and direct theoretical developments.