Contractual Commitments, Bargaining Power, and Governance Inseparability: Incorporating History Into Transaction Cost Theory

*Argyres is the corresponding author for this paper; he can be reached at nargyres@marshall.usc.edu or at (213) 740-5552. The authors names are listed in alphabetical order; they contributed equally to the writing of this paper. We thank three anonymous referees for many useful comments and suggestions. Transaction cost economics (TCE) is becoming a predominant economic theory of the firm. In this theory, transactions with particular characteristics are said to be efficiently governed by particular organizational arrangements, and not others. Thus, firms are said to be formed around transactions characterized by uncertainty and by economic spillovers, especially those resulting