A conjectural variation approach to vertical integration in agricultural cooperatives

Yung-Chang Wang

Agricultural Economics, 2017, vol. 63, issue 5, 228-233

Abstract: Under the assumption that agricultural cooperative is a form of vertical integration, this paper, using conjectural variations, solves the profit-maximizing problem faced by the members in the multi-plant firm model in which they are vertically integrated with the agricultural cooperative. The average principle, the marginal principle, and the linear combination principle are derived for the competitive behaviour, collusive behaviour, and Cournot behaviour, respectively. The Nash equilibrium and economic efficiency in the cooperative system are then discussed. Finally, the model is numerically solved in an illustration. The marginal principle ensures the cooperative system to remain socially optimal in the competitive market.

Keywords: collusive behaviour; Cournot behaviour; Nash equilibrium; multi-plant firm (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://agricecon.agriculturejournals.cz/doi/10.17221/202/2016-AGRICECON.html (text/html)
http://agricecon.agriculturejournals.cz/doi/10.17221/202/2016-AGRICECON.pdf (application/pdf)
free of charge

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:caa:jnlage:v:63:y:2017:i:5:id:202-2016-agricecon

DOI: 10.17221/202/2016-AGRICECON

Access Statistics for this article

Agricultural Economics is currently edited by Ing. Zdeňka Náglová, Ph.D.

More articles in Agricultural Economics from Czech Academy of Agricultural Sciences
Bibliographic data for series maintained by Ivo Andrle ().