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Influence Costs In Heterogeneous Cooperatives: A Formal Model Of Sales Distortion

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  • Bogetoft, Peter
  • Olesen, Henrik Ballebye

Abstract

Modern agricultural marketing cooperatives must implement farm-level differentiation to meet requirements from high-quality market segments, e.g. consumers focusing on animal welfare. This makes the cooperatives internally heterogeneous and increases the influence costs. In particular, the marketing of specialty, high-quality products is a controversial issue for cooperatives, because different producer groups have different interests. The standard producers, who normally hold the majority vote in the cooperatives, are reluctant to promote the sale of specialty products and hereby reduce the bargaining power of the specialty producers. We explore these arguments in a formal model.

Suggested Citation

  • Bogetoft, Peter & Olesen, Henrik Ballebye, 2003. "Influence Costs In Heterogeneous Cooperatives: A Formal Model Of Sales Distortion," 2003 Annual meeting, July 27-30, Montreal, Canada 22190, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea03:22190
    DOI: 10.22004/ag.econ.22190
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    References listed on IDEAS

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    1. Murray Fulton, 1995. "The Future of Canadian Agricultural Cooperatives: A Property Rights Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(5), pages 1144-1152.
    2. Murray Fulton & Konstantinos Giannakas, 2001. "Organizational Commitment in a Mixed Oligopoly: Agricultural Cooperatives and Investor-Owned Firms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(5), pages 1258-1265.
    3. George Hendrikse & Jos Bijman, 2002. "On the emergence of new growers' associations: self-selection versus countervailing power," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 29(2), pages 255-269, June.
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    Cited by:

    1. Evans, Lewis & Meade, Richard, 2005. "The Role and Significance of Cooperatives in New Zealand Agriculture, A Comparative Institutional Analysis," Working Paper Series 3847, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    2. Michael L. Cook, 2018. "A Life Cycle Explanation of Cooperative Longevity," Sustainability, MDPI, vol. 10(5), pages 1-20, May.
    3. Iliopoulos, C. & Hendrikse, G.W.J., 2008. "Influence Costs in Agribusiness Cooperatives: Evidence from Case Studies," ERIM Report Series Research in Management ERS-2008-040-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    4. Evans, Lewis & Meade, Richard, 2005. "The Role and Significance of Cooperatives in New Zealand Agriculture, A Comparative Institutional Analysis," Working Paper Series 18942, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    5. repec:vuw:vuwscr:18942 is not listed on IDEAS

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    More about this item

    Keywords

    Agribusiness;

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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