A Study on the Coordination Problem between Taipei Agricultural Products Marketing Company and Its Trading Partners-An Organization Economics Perspective
Date Issued
2012
Date
2012
Author(s)
Chen, Yuan-Han
Abstract
In order to stabilize the prices of vegetables and fruits in Taipei Metropolis, the Government established Taipei Agricultural Products Marketing Company (TAPMC). TAPMC provides a trading platform between farmers or their representatives and retailers of vegetables and fruits and is expected to reach equilibrium prices acceptable for both farmers and consumers. However, the prices of vegetables and fruits still fluctuate sometimes and the benefits of farmers and consumers damaged. Thus the purpose of this thesis is to study the transaction costs incurred in TAPMC in its formation of agricultural prices. Besides the aforementioned analysis, this thesis also studies why TAPMC’s own supply business with supermarket systems in Taipei Metropolis and export business kept losing money in recent years. These issues are analyzed from the perspective of organizational economics, too.
Base on transaction costs theory, property rights theory and agency theory, the thesis first studies the interaction among the participants of TAPMC’s auction market. TAPMC’s regulations on the behaviors of suppliers and demanders in the auction are first introduced and inspected from the perspective of transaction costs. The thesis also examines whether proxy problem would generate according to agency theory in the relation between TAPMC and its auctioneers. In the second part of the analysis, the transaction costs incurred in TAPMC’ supply and foreign businesses are discussed. Then the factors effecting the size of transaction cost are analyzed.
The thesis concludes that strengthening the grading and packing of the traded vegetables and fruits, reducing fee evasion, and establishing effective incentive system for the auctioneers, are the main methods to lower transaction costs in TAPMC auction. The study also suggests that more flexible contracts with TAPMC’s trading partners in its supply and export businesses should be adopted in order to reduce transaction costs and enhance TAPMC’s competitiveness. In addition, a database should be constructed to reduce the uncertainty in transaction and thus transaction costs in TAPMC’s supply and export businesses.
Subjects
organizational economics
Taipei Agricultural Products Marketing Company
transaction costs
auction transaction
supply and export business
Type
thesis
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