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Sales Distortion In Heterogeneous Cooperatives

In: Vertical Markets and Cooperative Hierarchies

Author

Listed:
  • Peter Bogetoft

    (The Royal Veterinary and Agricultural University (KVL))

  • Henrik Ballebye Olesen

    (Copenhagen Economics)

Abstract

We show that the internal conflicts in cooperatives can distort sales and reduce the marketing of high-quality products. The conflicts arise because modern agricultural marketing cooperatives must implement farm-level differentiation to meet requirements from high-quality market segments, e.g. consumers focusing on animal welfare. When standard producers hold the majority vote in the cooperatives, they are reluctant to promote the sales of specialty products to first best levels even though this does not affect the sales of standard products. The cooperatives will therefore tend to under-produce specialty products.

Suggested Citation

  • Peter Bogetoft & Henrik Ballebye Olesen, 2007. "Sales Distortion In Heterogeneous Cooperatives," Springer Books, in: Vertical Markets and Cooperative Hierarchies, chapter 0, pages 213-223, Springer.
    • Handle: RePEc:spr:sprchp:978-1-4020-5543-0_12
    DOI: 10.1007/1-4020-5543-0_12
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    Citations

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    Cited by:

    1. Grashuis, Jasper & Cook, Michael Lee, 2021. "Members of cooperatives: more heterogeneous, less satisfied?," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 24(5), April.
    2. Grashuis, Jasper & Cook, Michael, 2016. "Capital, Ownership, and Governance: Analyzing the Structure of U.S. Farmer Cooperatives," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235677, Agricultural and Applied Economics Association.
    3. Pedersen, Michael Friis, 2012. "Reallocation of price risk among members," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122529, European Association of Agricultural Economists.
    4. Höhler Julia, 2017. "Heterogenität von Mitgliederstrukturen als Herausforderung für Genossenschaften im Agribusiness," Zeitschrift für das gesamte Genossenschaftswesen, De Gruyter, vol. 67(1), pages 21-35, March.
    5. Pedersen, Michael, 2015. "Reallocation of Price Risk among Cooperative Members," 2015 Conference, August 9-14, 2015, Milan, Italy 212616, International Association of Agricultural Economists.

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