Horizon and Free-Rider Problems in Cooperative Organizations

Konstantinos Giannakas (), Murray Fulton and Juan Sesmero ()

Journal of Agricultural and Resource Economics, 2016, vol. 41, issue 3, 21

Abstract: This paper develops a model of heterogeneous individuals to analyze the interacting horizon and free-rider problems faced by cooperative organizations. Analytical results identify the conditions under which a cooperative will form despite these property rights problems and show that (i) differences in members’ time horizons need not necessarily lead to short-term cooperative investments and (ii) free riding is not always a problem for cooperatives. The analysis also shows how a cooperative can use a membership fee to address these property rights problems and provides additional insights into the relationship between a cooperative’s cost structure and membership fees.

Keywords: Public; Economics (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:jlaare:246170

DOI: 10.22004/ag.econ.246170

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