Consumer Cooperatives and Welfare in a Mixed Oligopoly

Marco Marini and Alberto Zevi

No 1010, Working Papers from University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini

Abstract: Consumer co-operatives constitute a highly successful example of democratic forms of enterprises operating in developed countries. They are usually organized as medium or large-scale firms competing with profit seeking firms in retail industries. In this paper we model such a situation as a mixed oligopoly in which consumer co-operatives maximize consumer-members' utilities and distribute them a patronage rebate on their goods purchase. We show that when consumers possess quasilinear preferences over a bundle of symmetrically differentiated goods and firms operate with a linear technology, the presence of consumer co-operatives positively a?ects all industries output and social welfare. The effect of Co-ops on welfare is shown to be more significant when goods are either complements or highly di?erentiated and when competition is ? la Cournot rather than ? la Bertrand.

Keywords: Consumer Co-operatives; Profit-maximizing Firms; Mixed Oligopoly. (search for similar items in EconPapers)
JEL-codes: L21 L22 L31 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2010, Revised 2010
New Economics Papers: this item is included in nep-com, nep-ind and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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