Quality provision and governance structure variety: Pooling versus double markup

Qiao Liang (), George W. J. Hendrikse and Zuhui Huang ()

IAMO Forum 2010: Institutions in Transition – Challenges for New Modes of Governance from Leibniz Institute of Agricultural Development in Central and Eastern Europe (IAMO)

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.

Keywords: Quality; Cooperatives; Investor-Owned Firms (search for similar items in EconPapers)
JEL-codes: C72 L22 Q13 (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:iamo10:52694

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