This paper discusses the role of auctions as a governing factor in the livestock market in Brazil (especially cattle), considering the framework of the transaction costs economics. The main question is to discuss under which situations the auctions emerge as an efficient governing structure, compared with other forms of governance, whether contractual forms or the spot market. The paper compares some alternative arrangements, such as direct sales or contractual relationship, along the beef chain, from the farmer to slaughterhouses and among farmers. The costs of negotiation, information and monitoring that emerge in different institutional environments are the key aspects that explain the conditions in which auctions prevail or not as a superior governance structure in the livestock market.
governing structure; livestock market; auctions; efficiency
