Perceptions of Market Efficacy, Transaction Costs, and Vertical Disintegration in Offshore Oil Gathering

Sample‐survey information is used to assess aspects of the predictive competence of the transaction‐cost paradigm. The extent of vertical disintegration by oil companies in offshore oil gathering is shown to be consistent with the revealed efficacy of the markets in intermediate goods and services. Market efficacy is assessed in relation to oil company perceptions of and other information relating to these markets.