Transaction and transactors’ choices: What we have learned and what we need to explore

Oliver Williamson argued that the transaction as defined by John Commons is the basic unit of transaction cost economics, yet few researchers have analyzed transactions in all the complexity that Commons described. Institutional economists have formulated three fundamental claims about three dimensions of transactions: (1) The rule-making/enforcing process, even if invariant for efficiency (when transaction costs are null), has an impact on transactors’ choices; (2) the transactor’s choices have an impact on the political arena; and finally, (3) the transactor’s choices (especially, concerning investments) have an impact on market competition. This chapter explains and recombines these dimensions in order to identify promising avenues for future research.