Stockholm, Oct 12 (THAINDIAN NEWS) The Nobel Prize for Economics was awarded on Monday jointly to Elinor Ostrom and Oliver Williamson, the Royal Swedish Academy of Sciences announced.

The Selection committee said that, it had awarded the award to Oliver “for his analysis of economic governance, especially the boundaries of the firm”

Oliver Eaton Williamson was born on September 27, 1932. He is a noted author in the area of transaction cost economics. Oliver Williamson did his B.Sc. in management from the MIT Sloan School of Management in 1955, M.B.A. from Stanford University in 1960, and his Ph.D. from Carnegie Mellon University in 1963.

He has held professorships in business administration, economics, and law at the University of California, Berkeley since 1988 and is currently the noted Edgar F. Kaiser Professor Emeritus at the Haas School of Business.

According to the Nobel Selection Committee, the citation for Oliver read that, “Oliver Williamson has argued that markets and hierarchical organizations, such as firms, represent alternative governance structures which differ in their approaches to resolving conflicts of interest. The drawback of markets is that they often entail haggling and disagreement. The drawback of firms is that authority, which mitigates contention, can be abused. Competitive markets work relatively well because buyers and sellers can turn to other trading partners in case of dissent. But when market competition is limited, firms are better suited for conflict resolution than markets. A key prediction of Williamson’s theory, which has also been supported empirically, is therefore that the propensity of economic agents to conduct their transactions inside the boundaries of a firm increases along with the relationship-specific features of their assets.”

The prize, which is also formally called The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. The last year recipient was Paul Krugman of the US.