Abstract

Transaction Cost Economics (TCE) has formed the basis of interorganizational governance research for the past thirty years. This paper summarizes TCE and explores some of its criticisms, namely its restricted solution set and its ignorance of trust-based behaviors. Some of these concerns are addressed by the relational view of interorganizational governance, although a more compelling solution appears to be a hybrid of these theories. Suggestions for future research and highlights of prominent IS research utilizing these theories are included.

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