Transaction Costs



While I was a student at Purdue, I was elected as a Senator for my college (ex: LAS, Engineering, Business) during my first semester as a Freshman. As a result, the previous Senators were graduating. Each college usually has about two Senators. During my first, semester I was the only Senator for my college. Thus, the transaction cost is reduced as I do not have to consult with another member. However, in this case there is an opportunity for the transaction cost to augment as I am new to this position and the fact that I do not have a fellow Senator to consult with.

I feel the concept of transaction cost is especially prevalent in a government esque organizations due to the transition of ‘power’. In my case as I mentioned the previous Senators were graduating, hence I had to take a decision on whether to continue their projects or start new initiatives of my own. I decided to complete one of their projects which was near completion and then start on my own. Their project was to ease the tranfer requirements into other colleges. This was especially important as I was a Senator for the College of Exploratory Studies (undeclared). There are more than 2200 students who are undeclared, hence this project was quite meaningful to me and my constituents. Since, this project was near completion I thought that this task would not take much of time. However, there were a lot of hold-ups along the way. Such as the transfer of knowledge, it took me more time to be well informed on this project due to the fact that progress reports were not diligently filled out. This may be due to the fact that the former Senators thought that this project would be completed before their term ended. As a result, I had to contact the previous Senators and meet with them to learn more about their project rather than just go off the progress reports. I felt that I had reduced into a middle man.


Another instance occurred similarly due to lack of due diligence or more likely ‘senioritis’. Once I was able to finish the prior project I mentioned I started working on a mental health facility CAPS (Counseling and Psychological Services) and Health integrated into PUSH (Purdue University Student Health). This would allow every student the opportunity to receive counseling for free. For the student government to act as a catalyst for this merger to happen, we had to raise funding and promote this service. As a result, for any Senator to claim funds from the board we had to submit a financial report outlying our spending habits for the last year. Once again, the former Senators did not update this file. I was responsible for the initial marketing so it was crucial I received the funds to start ASAP to raise awareness of the proposed merger and receive enough signatures for a petition. As a result, I had to track down the former Senators again, wait for them to finish filling out the form and then present it to the board. This process took me more than a week. Hence, I lost out on week’s worth of marketing. Due to these hold ups in transaction costs, it reduced my overall efficiency and time.

Comments

  1. Professor ArvanSeptember 18, 2017 at 5:22 AM

    I gather from this that you are a transfer student. Maybe in some subsequent post you'll explain that and how it has gone for you.

    I found it interesting that in discussing your role as a student Senator your talked about your relationships with the previous Senators from your college, but didn't talk at all about the relationship with the Senators from other colleges. Why is that? Also, as somebody who was new to the position, I thought you might follow the lead of those who had more experience, but you seemed to have your on independent judgment s on these matters. You might have explained how that came to be.

    It would have helped to understand things if you said something that I'm going to guess at here - The College of Exploratory studies has mainly first year students. Assuming that is true, it then makes sense that you were a Senator as a first year student. But what about new Senators from other colleges. Had they been on campus longer? I would like to know if experience matters for a first time Senator, but you didn't comment on that.

    Beyond there is a question of how much authority the Student Senate has. I don't know about governance at Purdue, but here there is both a Student Senate and a Faculty Senate. On the transfer requirements into other colleges, for example, this would have to be a matter that the faculty approve of as well.

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  2. Francis Edgeworth Econ 490 Fall 2017September 22, 2017 at 11:10 AM

    Yes, Professor I am a transfer student. There was no issue with the other Senators, in fact, they were guiding me on how to get the formalities done. Instead of following the lead of my fellow peers, I had to follow the lead of my constituents as I am basically a representative for the 2200 students. To answer your other question, I was indeed a freshman. I would say experience does matter as you learn on the job, but there are always other people to guide you.

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