Quality provision and governance structure variety: Pooling versus double markup
George W. J. Hendrikse and
IAMO Forum 2010: Institutions in Transition – Challenges for New Modes of Governance from Leibniz Institute of Agricultural Development in Central and Eastern Europe (IAMO)
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.
Keywords: Quality; Cooperatives; Investor-Owned Firms (search for similar items in EconPapers)
JEL-codes: C72 L22 Q13 (search for similar items in EconPapers)
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Persistent link: http://EconPapers.repec.org/RePEc:zbw:iamo10:52694
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