<P> An example of measurement, one of North's four factors of transaction costs, is detailed in Mancur Olson's work Dictatorship, Democracy, and Development (1993)--Olson writes that roving bandits calculate the success of their banditry based on how much money they can take from their citizens . Enforcement, the second of North's factors of transaction costs, is exemplified in Diego Gambetta's book The Sicilian Mafia: the Business of Private Protection (1996). Gambetta describes the concept of the "Peppe," who occupies the role of mediator in dealings with the Sicilian mafia--the Peppe is needed because it is not certain that both parties will maintain their end of the deal . Measurement and enforcement comprise North's third factor, ideological attitudes and perceptions--each individual's views influence how they go about each transaction . </P> <P> Williamson argues in The Mechanisms of Governance (1996) that Transaction Cost Economics (TCE) differs from neoclassical microeconomics in the following points: </P> <Table> <Tr> <Th> Item </Th> <Th> Neoclassical microeconomics </Th> <Th> Transaction cost economics </Th> </Tr> <Tr> <Td> Behavioural assumptions </Td> <Td> Assumes hyperrationality and ignores most of the hazards related to opportunism </Td> <Td> Assumes bounded rationality </Td> </Tr> <Tr> <Td> Unit of analysis </Td> <Td> Concerned with composite goods and services </Td> <Td> Analyzes the transaction itself </Td> </Tr> <Tr> <Td> Governance structure </Td> <Td> Describes the firm as a production function (a technological construction) </Td> <Td> Describes the firm as a governance structure (an organizational construction) </Td> </Tr> <Tr> <Td> Problematic property rights and contracts </Td> <Td> Often assumes that property rights are clearly defined and that the cost of enforcing those rights by the means of courts is negligible </Td> <Td> Treats property rights and contracts as problematic </Td> </Tr> <Tr> <Td> Discrete structural analysis </Td> <Td> Uses continuous marginal modes of analysis in order to achieve second - order economizing (adjusting margins) </Td> <Td> Analyzes the basic structures of the firm and its governance in order to achieve first - order economizing (improving the basic governance structure) </Td> </Tr> <Tr> <Td> Remediableness </Td> <Td> Recognizes profit maximization or cost minimization as criteria of efficiency </Td> <Td> Argues that there is no optimal solution and that all alternatives are flawed, thus bounding "optimal" efficiency to the solution with no superior alternative and whose implementation produces net gains </Td> </Tr> <Tr> <Td> Imperfect Markets </Td> <Td> Downplays the importance of imperfect markets </Td> <Td> Robert Almgren and Neil Chriss, and later Robert Almgren and Tianhui Li, showed that the effects of transaction costs lead portfolio managers and options traders to deviate from neoclassically optimal portfolios extending the original analysis to derivative markets . </Td> </Tr> </Table> <Tr> <Th> Item </Th> <Th> Neoclassical microeconomics </Th> <Th> Transaction cost economics </Th> </Tr>

Which type of goods and services has the highest transaction cost