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Cognition and Incentives in Cooperatives

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  • Wei, A.
  • Hendrikse, G.W.J.

Abstract

We extend the results of Feng and Hendrikse (2012) by investigating the relationship between cognition and incentives in cooperatives versus investor-owned firms (IOFs) in a multi-tasking principal-agent model. The principal chooses the incentive intensity as well as the precision of monitoring, while the agent chooses the activities. We establish that a cooperative is uniquely efficient when either the synergy between the upstream and downstream activities or the knowledgeability of the members regarding the cooperative enterprise is sufficiently high.

Suggested Citation

  • Wei, A. & Hendrikse, G.W.J., 2022. "Cognition and Incentives in Cooperatives," ERIM Report Series Research in Management ERS-2022-007-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.
    • Handle: RePEc:ems:eureri:137124
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    References listed on IDEAS

    as
    1. Deng, Wendong & Hendrikse, George, 2014. "Managerial vision bias and cooperative governance," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182924, European Association of Agricultural Economists.
    2. Cook, Michael L., 1994. "The Role of Management Behavior in Agricultural Cooperatives," Journal of Agricultural Cooperation, National Council of Farmer Cooperatives, vol. 9, pages 1-17.
    3. Wouter Dessein & Tano Santos, 2021. "Managerial Style and Attention," American Economic Journal: Microeconomics, American Economic Association, vol. 13(3), pages 372-403, August.
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    Keywords

    Cognition; incentives; cooperative; governance; multi-tasking;
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