ABSTRACT
In the basic transaction cost model outlined in the previous chapter, the primary focus was on the governance implications of contracting hazards resulting from investments in transaction-specific assets — reflecting the emphasis on asset specificity in most work in the transaction cost economics tradition. However, asset specificity is only one example (albeit a significant one) of a more general class of contractual hazards. Indeed, in his most recent statement of the transaction cost economics research agenda, Williamson (1996, p. 3) suggests that: “… identification, explication and mitigation of contractual hazards — which take many forms, many of which long went unremarked — are central to the exercise.”
