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Internal governance and member investment behavior in energy cooperatives: An experimental approach

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  • Höfer, Hanna-Helena
  • Rommel, Jens

Abstract

Cooperatives may become increasingly important as suppliers of electricity from renewable resources. Numerous governance models exist for establishing a renewable energy cooperative. Since members self-select into the organization, causal links between methods of internal governance and member characteristics are difficult to identify. We demonstrate how economic experiments can address this problem. In a simple social-dilemma game, we study the impact of heterogeneity in wealth on investment in a jointly owned enterprise under two different governance models. We do not find that member heterogeneity or governance model affect investment levels. A participant's endowment appears to be the most important factor explaining variation in investment. Good knowledge of cooperative governance has a positive impact on investment in the game and good knowledge of game theory has a negative impact on investment in the game. Future research should investigate the effect of the distribution of control rights on the performance of cooperative enterprises.

Suggested Citation

  • Höfer, Hanna-Helena & Rommel, Jens, 2015. "Internal governance and member investment behavior in energy cooperatives: An experimental approach," Utilities Policy, Elsevier, vol. 36(C), pages 52-56.
    • Handle: RePEc:eee:juipol:v:36:y:2015:i:c:p:52-56
    DOI: 10.1016/j.jup.2015.09.003
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    Cited by:

    1. Haji Bashi, Mazaher & De Tommasi, Luciano & Le Cam, Andreea & Relaño, Lorena Sánchez & Lyons, Padraig & Mundó, Joana & Pandelieva-Dimova, Ivanka & Schapp, Henrik & Loth-Babut, Karolina & Egger, Christ, 2023. "A review and mapping exercise of energy community regulatory challenges in European member states based on a survey of collective energy actors," Renewable and Sustainable Energy Reviews, Elsevier, vol. 172(C).
    2. Rommel, Jens & Sagebiel, Julian & Müller, Jakob R., 2016. "Quality uncertainty and the market for renewable energy: Evidence from German consumers," Renewable Energy, Elsevier, vol. 94(C), pages 106-113.
    3. Yildiz, Özgür, 2016. "Public-private partnerships, incomplete contracts, and distributional fairness – when payments matter," MPRA Paper 74552, University Library of Munich, Germany.
    4. Ziming Liu & Jie Qu & Xinrui Wu & Xing Niu & Shuyi Feng, 2024. "Improving member satisfaction with cooperatives: The role of participation in governance," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 95(3), pages 703-722, September.
    5. Ge, Tao & Hao, Zixuan & Chen, Yuan & Chen, Zhanbo, 2024. "Energy intensity constraints and corporate investment strategies: Evidence from Chinese listed enterprises," Finance Research Letters, Elsevier, vol. 64(C).
    6. Gencer, Busra & van Ackere, Ann, 2021. "Achieving long-term renewable energy goals: Do intermediate targets matter?," Utilities Policy, Elsevier, vol. 71(C).

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    More about this item

    Keywords

    Energy transition; Germany; Land-use conflicts and governance;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • P13 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Cooperative Enterprises

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