Neoclassical Economics, Institutional Economics, and Economic Sociology; A Comparative Study

Comparing the three epistemic areas of neoclassical economics, institutional economics, and economic sociology, this paper seeks to reveal their commonalities and differentiations. The common feature of these domains is their trial to understand economic phenomena. The first two areas are in the field of the epistemology of economics and the third one is in the field of the epistemology of sociology. Introducing the neoclassical economics, this paper addresses the main assumptions and implications of these hypotheses. In the institutional economics, the North’s and Coase’s critiques to neoclassical economics will be addressed, and the concept of ‘transaction costs’ in North’s, Coase’s, and Williamson's views is drawn to attention. In the sociology of economics, classical economic sociology and new economic sociology will be discussed focusing on their main representatives that are Weber and Granovetter respectively. Finally, some of the major controversies among free-market advocates, institutionalism advocates, and defenders of economic sociologists in Iran are investigated.