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Consumer cooperatives as an alternative form of governance: The case of the broadband industry

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  • Sadowski, Bert M.

Abstract

With a growing number of consumer cooperatives in non-agrarian industries such as energy and broadband, there is a need to better understand their emergence as a viable form of governance. In this context, the paper uses Mikami’s (2010) model on consumer cooperatives to explain their emergence as a result of their ability to generate additional equity financing through the membership market. It focuses on the motivations of consumers to financially contribute to a cooperative by examining the risks and benefits associated with the investment. Based on a survey of 759 consumers, it links their motivations for joining a cooperative to different forms of risks and benefits associated with the investment. It shows that the risks related to cost sharing and switching costs are important determinants for consumers. Other factors that affected the likelihood of joining a cooperative were expected benefits with respect to user network externalities and infrastructure gains.

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  • Sadowski, Bert M., 2017. "Consumer cooperatives as an alternative form of governance: The case of the broadband industry," Economic Systems, Elsevier, vol. 41(1), pages 86-97.
    • Handle: RePEc:eee:ecosys:v:41:y:2017:i:1:p:86-97
    DOI: 10.1016/j.ecosys.2016.04.004
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    1. Sahebali, M.W.W. & Sadowski, Bert M. & Nomaler, O. & Brennenraedts, R., 2021. "Rolling out of fibre optic networks in intermediate versus urban areas: An exploratory spatial analysis in the Netherlands," Telecommunications Policy, Elsevier, vol. 45(5).

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    More about this item

    Keywords

    Consumer cooperatives; Broadband Industry; Governance;
    All these keywords.

    JEL classification:

    • P13 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Cooperative Enterprises
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O35 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Social Innovation
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights

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