This paper simulates Ronald Coase’s transaction cost approach to firm organizing using agent-based modeling, and contextualizes and contrasts it with the earlier division-of-labor/specialization theory of the firm that Coase challenged and sought to replace. The simulation tests firm emergence...

It has become commonplace in management research to refer to “transaction cost theory,” a joint Coase-Williamson approach to economic organizing. This off-the-cuff usage overlooks their differences by treating Coase as a pre-Williamsonian. I argue that their theoretical frameworks are...