On the Evolution of Product Portfolio of Cooperatives versus IOFs: An Agent-Based Analysis of the Single Origin Constraint

Wendong Deng and George Hendrikse

ERIM Report Series Research in Management from 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

Abstract: An agent-based model is developed to address the relationship between the ownership structure of an enterprise and the evolution of its product portfolio. The coherence and evolution of a product portfolio is operationalized by transition rules regarding the Moore environment. The distinguishing feature of a cooperative is the single origin constraint according to Cook (1997), which is modelled as a cooperative assigning an infinite lifetime to the first product in its product portfolio, while all other products have finite lifetime. All product of an investor-owned firm (IOF) are assumed to have finite lifetime. Our simulation results show that the single origin constraint pulls the activities of the cooperative in one cluster centered around the first activity, while the IOF’s product portfolio develops in a centrifugal way. The cooperative and the IOF are more diversified in a mixed duopoly.

Keywords: Diversification; agent-based model; coherence; single origin constraint; cooperatives (search for similar items in EconPapers)
Pages: 17
Date: 2022-05-30
New Economics Papers: this item is included in nep-cmp and nep-hme
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