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Emergence of cooperatives and farmer heterogeneity

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  • Petruchenya, Anna
  • Hendrikse, George

Abstract

This paper studies different patterns of emergence of cooperatives. We examine how heterogeneity of farmers, reflected in a distance measure, affects equilibrium outcomes. Our results show that when distance costs are low, cooperative emerges bottom-up. With medium distance costs, one of the farmers takes an initiative. With high distance costs, no cooperative emerges. Including an outsider in the game changes equilibrium strategies of players. Under complete information, cooperative is either formed with an initiative of one farmer or it emerges top-down with outsider’s support. When information is incomplete, cooperative can emerge bottom-up, i.e. with two active farmers, or top-down.

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  • Petruchenya, Anna & Hendrikse, George, 2014. "Emergence of cooperatives and farmer heterogeneity," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182772, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae14:182772
    DOI: 10.22004/ag.econ.182772
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    1. Richard J. Sexton & Terri A. Sexton, 1987. "Cooperatives as Entrants," RAND Journal of Economics, The RAND Corporation, vol. 18(4), pages 581-595, Winter.
    2. Qiao Liang & George Hendrikse, 2013. "Core and Common Members in the Genesis of Farmer Cooperatives in China," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 34(3-5), pages 244-257, April.
    3. Dunn, John R., 1988. "Basic Cooperative Principles and Their Relationship to Selected Practices," Journal of Agricultural Cooperation, National Council of Farmer Cooperatives, vol. 3, pages 1-11.
    4. Venkatesh Bala & Sanjeev Goyal, 2000. "A Noncooperative Model of Network Formation," Econometrica, Econometric Society, vol. 68(5), pages 1181-1230, September.
    5. Svetlana Golovina & Jerker Nilsson, 2011. "The Russian top-down organised co-operatives - reasons behind the failure," Post-Communist Economies, Taylor & Francis Journals, vol. 23(1), pages 55-67.
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    Cited by:

    1. Jan Falkowski & Pavel Ciaian, 2016. "Factors Supporting the Development of Producer Organizations and their Impacts in the Light of Ongoing Changes in Food Supply Chains: A Literature Review," JRC Research Reports JRC101617, Joint Research Centre.

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    Institutional and Behavioral Economics;

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