BIASES AND BOUNDARIES: A BOUNDED-RATIONALITY-AUGMENTED TRANSACTION COST THEORY

 ODC Webinar

BIASES AND BOUNDARIES:

A BOUNDED-RATIONALITY-AUGMENTED TRANSACTION COST THEORY

Nicolai J. Foss
Professor of Strategy at the Department of Strategy and Innovation, CBS  

---   15^th May 2025, Thursday at 9am EST/3pm CET   --- 

Transaction cost economics (TCE) has emerged as a highly influential theory in macro-management research. However, traditional TCE does not consider the role of systematic decision-making errors in shaping firms’ boundaries. We draw on the heuristics and biases literature to analyze how cognitive biases (errors in decision-making) may shape firms’ boundary decisions in “non-standard” ways. We also show how this literature adds to the core TCE idea that actors need to look ahead, identify potential hazards to exchanges, and deploy repairs and safeguards in contracts and organizational arrangements by pointing to hazards that are rooted primarily in cognition rather than in opportunism. In addition, we show how actors can opportunistically use knowledge of biases in exchanges.

About the Speaker: 

Nicolai J Foss is Professor of Strategy at the Copenhagen Business School,  Professor II at the Norwegian School of Economics, External Chair at the Danish Institute for Advanced Study, and a Visiting Chair at the Hong Kong Polytechnic University. He is interested in the intersection of strategy and organizational economics. Foss is a Fellow of the Strategic Management Society and a Clarivate Highly Cited Scholar

Registration closes 14th MaY, 2025 at 9 am (eastern time)

Hope you will be able to join us!