Cognition and Incentives in Cooperatives

Anyan Wei 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: 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.

Keywords: Cognition; incentives; cooperative; governance; multi-tasking (search for similar items in EconPapers)
Pages: 25
Date: 2022-05-30
New Economics Papers: this item is included in nep-cta, nep-hme and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:ems:eureri:137124

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