A Study On The Profits Conversion Of Implicit Transaction Costs

Reducing transaction costs is one of fundamental goals of institutional arrangement. Through redefining transaction costs, this thesis analyzes the path and mechanism to reduce transaction costs from the perspective of internal of transaction costs. The thesis defines the total transaction costs as the gap between profits frontier and actual profits, and break it into the explicit transaction costs and the implicit transaction costs, the former can be measured through accounting information, the latter which is caused by bounded rationality and opportunism behaviors cannot be observed and measured. At present, most of researches on transaction costs are focus on measurement and analysis of the explicit transaction costs. The thesis further puts the explicit transaction costs and the implicit transaction costs into the framework of analysis, and focus on the intrinsic mechanism of profit conversion of the implicit transaction cost. From two levels of the enterprise interior and external market to analyze mechanisms of profit conversion of the implicit transaction costs, the thesis finds increasing the explicit transaction costs cannot be necessarily increase the total transaction cost, in contrast, increasing the explicit transaction costs can lead to the implicit transaction costs sharply decrease and convert into profit, which decreases the total transaction costs.This thesis uses experimental and empirical methods on the analysis framework of transaction costs for inspection. And empirical results show that explicit transaction costs and efficiency of enterprise is a significant positive correlation, at the same time, explicit transaction costs and actual profit of enterprise is a significant positive correlation as well, which verify that the increase of the explicit transaction costs compressed the implicit transaction costs and increase the actual profit. Experimental results show that most of employees took opportunism behavior and lead to tremendous implicit transaction costs in the non-punishment experiment, while enterprises can implement costly punishment and effort levels of employees and actual profits of enterprises obviously increase in the punishment experiment. It declares that the increase of the explicit transaction costs decreases the implicit transaction costs, and makes the profit conversion of the implicit transaction costs come true. Both the empirical and experimental results well test and verify the analysis framework of transaction costs proposed in this thesis.There are two main innovations in this thesis: First, thinking about the interactive relationship between explicit and implicit transaction costs, this thesis redefines the transaction costs from the perspective of profit conversion of the implicit transaction costs, and analyzes the path and mechanism to reduce the transaction costs; Secondly, this thesis depicts and analyzes the transaction costs by comparative institutional experimental method, and well verifies the he interactive relationship between explicit and implicit transaction costs in the Laboratory microeconomic system .