Interface from Transaction Cost Approach

Abstract

Two decades ago, Oliver E. Williamson defined a transaction as the transfer of a good or service across a technologically separable interface, and yet the characteristics of interfaces have not been studied by transaction cost economics researchers. Another related concept is that of the module which is commonly defined as a unit sharing multiple interfaces in order to interact, integrate and combine, or be substituted, redeployed, transferred, and suplanted; but the term interface is referred to in very few studies of modularity. The purpose of this research is to describe and understand further the transaction mechanism related to the notion of interface (transaction interface). The analysis of transaction costs, institutions, and organizations from the perspective of the interface is proposed. We believe that the importance of studying interfaces has been increasing with the proliferation of economic activities over the Internet. Governance mechanisms existing beyond markets and organizations may likewise be explained by focusing on various interface aspects.