© The Nobel Foundation. Photo: U. Montan
Oliver E. Williamson
The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2009
Born: 27 September 1932, Superior, WI, USA
Affiliation at the time of the award: University of California, Berkeley, CA, USA
Prize motivation: "for his analysis of economic governance, especially the boundaries of the firm."
Contribution: Provided a theory of why some economic transactions take place within firms and other similar transactions take place between firms, that is, in the marketplace. The theory informs us about how to handle one of the most basic choices in human organization. When should decision power be controlled inside an organization, and when should decisions be left to the market.
Prize share: 1/2
Oliver Williamson was born in Superior, Wisconsin, in the United States. Although his parents were originally teachers, his father later started his own real estate company. After first studying at MIT and Stanford University, he earned his PhD from Carnegie Mellon University in Pittsburgh. He has held professorships at the University of Pennsylvania in Philadelphia, at Yale University, and at the University of California, Berkeley, among others. Oliver Williamson is married with five children.
Financial transactions do not only occur on financial markets, but also within organizations - companies, associations, households, and public authorities. Financial analysis has most often focused on markets, whereas Oliver Williamson's research concentrates more on organizations. According to Oliver Williamson, markets and companies used different conflict resolution methods. In the early 1970s, he proposed the theory that organizations are sometimes more efficient than markets because their conflicts are simple and cheaper to solve.