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Quality provision and governance structure variety: Pooling versus double markup

Author

Listed:
  • Liang, Qiao
  • Hendrikse, George W. J.
  • Huang, Zuhui

Abstract

This paper examines how farmers producing differentiated quality products choose different governance structures in a non-cooperative game between farmers, enterprises, and consumers. A cooperative and an IOF (investor owned firm) coexist in equilibrium and low quality is delivered by the cooperative. The trade-off between pooling and the elimination of the double markup determines the attractiveness of cooperatives compared to IOFs.

Suggested Citation

  • Liang, Qiao & Hendrikse, George W. J. & Huang, Zuhui, 2010. "Quality provision and governance structure variety: Pooling versus double markup," IAMO Forum 2010: Institutions in Transition – Challenges for New Modes of Governance 52694, Leibniz Institute of Agricultural Development in Central and Eastern Europe (IAMO).
    • Handle: RePEc:zbw:iamo10:52694
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    References listed on IDEAS

    as
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    3. Zhou, Jiehong & Jin, Shaosheng, 2009. "Adoption of Food Safety and Quality Standards by China’s Agricultural Cooperatives: A Way out of Monitoring Production Practices of Numerous Small-scale Farmers ?," 2009 Conference, August 16-22, 2009, Beijing, China 50293, International Association of Agricultural Economists.
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    5. Pradeep Dubey & John Geanakoplos, 2002. "Competitive Pooling: Rothschild-Stiglitz Reconsidered," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(4), pages 1529-1570.
    6. Yu, Jianyu, 2009. "Quality Provision and Farmer Inclusion of Agricultural Cooperatives," 2009 Conference, August 16-22, 2009, Beijing, China 51553, International Association of Agricultural Economists.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Quality; Cooperatives; Investor-Owned Firms;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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