ABSTRACT
This chapter integrates the category of cooperatives into the transaction cost approach developed by Oliver Williamson. Previous research has attempted to theorize cooperatives as either peer-group firms or market-firm hybrids. After discussing the scope and limits of these attempts, I follow Williamson’s methodology of investigating “discrete structural alternatives” by considering cooperatives as a third “pole of organization,” on equal ontological footing with markets and firms. To do so, I define the cooperative contract as both a capital and a labor constraint for members. I also highlight two new attributes of the transaction related to an agent’s wealth: one concerning only cooperatives and firms, and another concerning only cooperatives and markets.
