Uncertainty, market and organization[Incertitude, marché et organisation]

In Risk, Uncertainty and Profit, Knight poses the problem of controlling and reducing uncertainty by making it dependent on the form of social organization. The theory of the firm based on transaction costs turns its back on this approach by being a theory of choice and exchange without any real consideration of either production or uncertainty. Returning to Knight requires (i) to recognize the imperfection of information and the resulting failures of the price system, which implies to consider the importance of collective action and thus make room for the firm, (ii) to recognize the need for the firm to face the joint play of irreversibility and uncertainty by implementing collusive forms of organization.