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Transaction Cost Economics
A company always has the choice of doing something
Internally or attend the Market (outsourcing).
Bureaucracy costs
Less Efficient
Checkup Costs
Investigation Costs
Dependence Risks
Transaction Costs also known as Governance costs are the cost of overcoming the downsides.
Internal
Market
The choice is based on what is the cheapest option.
The costs are made up of production costs and transaction costs.
Research Question
Can transaction cost economics be applied to explain the governance structure of relationships between buyers and suppliers of software components and services in Software Ecosystems?
ΔPTC = ΔPC + ΔTC
ΔPC = PC_internal - PC_market
ΔTC = TC_internal - TC_market
TC_{i,m} = A + U + R
A = A_site + A_phyisical + A_human + A_dedicated + A_brand + A_temporal
A_site = S_architecture * C_architecture + S_translation * C_translation
A_physical = S_middleware * C_middleware
A_human = C_training + C_certification
A_brand = C_fees + C_contribution
Time spent on Architecture Changes
Averace Costs per hour of employee
Time spent on translations
Costs per hour of translator
AND / OR
Costs of external translator
Time spent on developing middlware components
Costs per hour of developer
Cost of Training
Cost of Certification
Cost of franchise or consortia fees
Cost of open source contribution
Sub Questions
How to translate the classic concept of
Asset Specificity
Recurrence
Uncertainty
Production Costs
to Software Ecosystems
Hypotheses
If PTC > 0, then TC_i will indicate the governance mode.
The higher the transaction costs, the more likely a relationship is governed by hierarchical governance
The lower the transaction costs, the more likely a relationship is governed by a market structure
Operationalisation
Validation of operationalisation
5 structured expert interviews
Testing the Hypotheses
Vignette Study
Thesis
By: Wilco van Duinkerken
Utrecht University, The Netherlands
Created at: May 12, 2009
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