Oliver "Olly"[4] Williamson was born in Superior, Wisconsin, on 27 September 1932.[4] He was the son of Sara Lucille (Dunn) and Scott Williamson, both of whom were high school teachers.[4] As a child, Williamson attended Central High School in Superior.[6]
Williamson’s dual enrollment between Ripon College and MIT[4] earned him his bachelor’s degree in management from the MIT Sloan School of Management in 1955. During his time in his undergraduate academic career, his studies in engineering sparked his initial interest in transaction costs.[4] After graduating, he worked as a project engineer for General Electric, as well as the Central Intelligence Agency.[4]
Found to be one of the most cited authors in the social sciences,[8] in 2009, he was awarded the Nobel Memorial Prize in Economics for "his analysis of economic governance, especially the boundaries of the firm",[9] sharing it with Elinor Ostrom. Williamson died on May 21, 2020, in Berkeley, California.[10][11]
Theory
By drawing attention at a high theoretical level to equivalences and differences between market and non-market decision-making, management and service provision, Williamson was influential in the 1980s and 1990s debates on the boundaries between the public and private sectors.
His focus on the costs of transactions led Williamson to distinguish between repeated case-by-case bargaining on the one hand and relationship-specific contracts on the other. For example, the repeated purchasing of coal from a spot market to meet the daily or weekly needs of an electric utility would represent case-by-case bargaining. But over time, the utility is likely to form ongoing relationships with a specific supplier, and the economics of the relationship-specific dealings will be importantly different, he argued.
Williamson was credited with the development of the term "information impactedness", which applies in situations of unequal access to information.[13] As he explained in Markets and Hierarchies, it exists "mainly because of uncertainty and opportunism, though bounded rationality is involved as well. It exists when true underlying circumstances relevant to the transaction, or related set of transactions, are known to one or more parties but cannot be costlessly discerned by or displayed for others". Thus, Williamson is to be counted among those who have taken issue with the view that the firm is another type of market, characterized by a nexus of contracts. In his own words: "But to regard the corporation only as a nexus of contracts misses much of what is truly distinctive about this mode of governance".[14][15]
Nobel Memorial Prize in Economic Sciences
In 2009, the Royal Swedish Academy of Sciences cited Williamson and Elinor Ostrom to share the 10-million Swedish kronor (£910,000; $1.44 million) prize "for his analysis of economic governance, especially the boundaries of the firm".[1] Williamson, in the BBC's paraphrase of the academy's reasoning, "developed a theory where business firms served as structures for conflict resolution".[16]
Personal life
He met his wife Dolores Celini in 1957, while they both lived in Washington, D.C.[4] They had five children.[4]
Awards and fellowships
The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, 2009.
Oeconomiae Doctorem Honoris Causa, PhD, Norwegian School of Economics and Business Administration, Jubilee Celebration, 1986.
Legacy
For his dedication to the field and his service to the institution, the Haas School of Business at Berkeley established the Williamson Award[4] in honor of Oliver Williamson. This prestigious award is presented to outstanding faculty members who embody Berkeley's four Defining Leadership Principles - Question the Status Quo, Confidence Without Attitude, Students Always, and Beyond Yourself.[17] Beginning in fiscal year 2013, the Williamson Award has been presented to the following faculty members:
Williamson, Oliver E. (1995). Organization Theory: From Chester Barnard to the Present and Beyond. New York: Oxford University Press. ISBN9780195098303.
Williamson, Oliver E. (1996). The Mechanisms of Governance. New York: Oxford University Press. ISBN978-0195078244.
^Williamson, O., Markets and Hierarchies: Some Elementary Considerations, The American Economic Review, May 1973, Vol. 63, No. 2, Papers and Proceedings of the Eighty-fifth Annual Meeting of the American Economic Association, pp. 316-325, accessed 13 February 2023
^Special Issue of Journal of Retailing in Honor of The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2009 to Oliver E. Williamson, Volume 86, Issue 3, pp. 209–290 (September 2010). Edited by Arne Nygaard and Robert Dahlstrom