20 | May | 2008 | Organizations and Markets

An Organization and a Market

| Randy Westgren |

Yesterday I visited a unique auction in the small town of Roeselare, in Western Flanders. A cooperative organization of vegetable and strawberry growers, REO Veiling, operates a 7 hectare receiving and shipping facility that serves their members and buyers (wholesale, supermarkets, export) from all over northern Europe. The trading floor has six electronic Dutch auction clocks that operate simultaneously, two for the Roeselare site, two for a sister site in Mechelen, and two for small lots/direct delivery. Mechelen has a matching facility and there are dozens of remote terminals for buyers. Prices are pooled across lots within a given crop and quality category; all growers receive an identical payout, even if their particular lot of a given quality drew a higher/lower bid. All transactions clear within the day. All product is turned and shipped within 18 hours of delivery. The combined exchange has a 95% market share for Belgium.

The grower/owners pay the exchange costs from their revenues. This includes third-party grading and sorting and third-party production monitoring.They own a brand name in common for the top quality shipped from the facility (which earns a significant premium) and individual growers may pack for a private label and accept the pool price from the day of delivery. The exchange will collect from the private label buyer upon shipment from the auction warehouse.

A very innovative hybrid organization. I’ll have to formalize a case study.

20 May 2008 at 4:39 pm Randy Westgren 3 comments

Tom Ulen is Blogging

| Peter Klein |

Tom Ulen, Swanlund Chair and Director of the Illinois Program in Law and Economics at the University of Illinois College of Law, is online at the Law & Econ Prof Blog. Tom’s textbook (with Robert Cooter), Law and Economics, is now in its fifth edition and continues to be a fine introduction to the L&E literature.

I was going to write “Welcome to the blogosphere!” until I discovered that he’s been doing this longer than we have.

20 May 2008 at 10:43 am Peter G. Klein Leave a comment

Me on Benkler

| Peter Klein |

Here is my review of Yochai Benkler’s The Wealth of Networks: How Social Production Transforms Markets and Freedom (Yale University Press, 2006). It will appear in the Fall 2008 issue of The Independent Review. Benkler has written a fine book, though I have some reservations, as explained in the review.

Here is Benkler’s website and here is a wiki for his book.