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Cooperative Incentives for Vertical Integration: The Bilateral Monopoly Case

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  • Bhuyan, Sanjib
  • Royer, Jeffrey S.

Abstract

A model for evaluating farmer cooperative incentives for integrating forward into processing activities is presented for the bilateral monopoly market structure. Analysis suggests that cooperatives lack an incentive to integrate unless they are successful in restricting producer output to optimal levels. This result provides an additional explanation for empirical observations.

Suggested Citation

  • Bhuyan, Sanjib & Royer, Jeffrey S., 1992. "Cooperative Incentives for Vertical Integration: The Bilateral Monopoly Case," 1992 Annual Meeting, August 9-12, Baltimore, Maryland 271391, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea92:271391
    DOI: 10.22004/ag.econ.271391
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    References listed on IDEAS

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    1. Peter Helmberger & Sidney Hoos, 1962. "Cooperative Enterprise and Organization Theory," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 44(2), pages 275-290.
    2. Richard E. Caves & Bruce C. Petersen, 1986. "Cooperatives' shares in farm industries: Organizational and policy factors," Agribusiness, John Wiley & Sons, Ltd., vol. 2(1), pages 1-19.
    3. Rogers, Richard T. & Marion, Bruce W., 1990. "Food Manufacturing Activities of the Largest Agricultural Cooperatives: Market Power and Strategic Behavior Implications," Journal of Agricultural Cooperation, National Council of Farmer Cooperatives, vol. 5, pages 1-15.
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