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An information economic rationale for cooperatives

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  • Peter Bogetoft

Abstract

We consider how to organise the processing and marketing of an agricultural product when farming costs are known only by the individual farmers. We show that when marginal costs are uncorrelated, the market for final goods is competitive, and the market for processing is non-competitive, the socially optimal production levels are sustained by a cooperative and a cooperative only. We show also that the cooperative form is particularly useful when the cost uncertainty is large and the net average revenue product is small. Copyright 2005, Oxford University Press.

Suggested Citation

  • Peter Bogetoft, 2005. "An information economic rationale for cooperatives," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 32(2), pages 191-217, June.
    • Handle: RePEc:oup:erevae:v:32:y:2005:i:2:p:191-217
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    Cited by:

    1. Pennerstorfer, Dieter & Weiss, Christoph R., 2012. "On the Relative Disadvantage of Cooperatives: Vertical Product Differentiation in a Mixed Oligopoly," Journal of Rural Cooperation, Hebrew University, Center for Agricultural Economic Research, vol. 40(1), pages 1-32.
    2. Bošková, Iveta & Ratinger, Tomáš, 2014. "Structure, Innovations and Performance of the Czech Dairy Value Chain," 140th Seminar, December 13-15, 2013, Perugia, Italy 163349, European Association of Agricultural Economists.
    3. Tomáš RATINGER & Iveta BOŠKOVÁ, 2013. "Strategies and effects of milk producers' organisations in the Czech Republic," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 59(3), pages 113-124.
    4. Kamila Ruzickova & Petr Korab, 2013. "Does horizontal cooperation create value? A residual income approach application on Czech agricultural data," MENDELU Working Papers in Business and Economics 2013-32, Mendel University in Brno, Faculty of Business and Economics.
    5. Schamel, G., 2018. "Grape Supply and Implicit Prices for Wine Quality Attributes," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277043, International Association of Agricultural Economists.
    6. Maria Giovanna BRANDANO & Claudio DETOTTO & Marco VANNINI, 2019. "Comparative Efficiency Of Agricultural Cooperatives And Conventional Firms In A Sample Of Quasi‐Twin Companies," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 90(1), pages 53-76, March.
    7. Schneider, Nathan, 2018. "An Internet of Ownership: Democratic Design for the Online Economy," OSF Preprints 2xyst, Center for Open Science.
    8. Schneider, Nathan, 2021. "Enabling Community-Owned Platforms: A Proposal for a Tech New Deal," OSF Preprints cp459, Center for Open Science.
    9. Bogetoft, Peter, 2021. "How upstream cooperatives limit downstream holdups," Journal of Economic Behavior & Organization, Elsevier, vol. 181(C), pages 156-168.
    10. Pennerstorfer, Dieter & Weiss, Christoph R., 2007. "Do Cooperatives Offer High Quality Products?," 103rd Seminar, April 23-25, 2007, Barcelona, Spain 9403, European Association of Agricultural Economists.
    11. Pennerstorfer, Dieter & Weiss, Christoph R., 2011. "Do Cooperatives Offer High Quality Products? Theory and Empirical Evidence from the Wine Market," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 115741, European Association of Agricultural Economists.
    12. Jan Vavřina & Kamila Růžičková, 2012. "Agricultural producers' groups in the Czech Republic: introductory review and discussion of the problem area economic performance measurement," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 60(7), pages 441-450.

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