How upstream cooperatives limit downstream holdups

Peter Bogetoft

Journal of Economic Behavior & Organization, 2021, vol. 181, issue C, 156-168

Abstract: In this paper, we consider a downstream firm negotiating with an upstream firm, and we investigate the impact of the organizational form of the upstream firm. We show that if the upstream firm is organized like a traditional cooperative, where the members have free delivery rights and where surplus is shared in proportion to the deliveries, the downstream firm is less subject to a holdup. The cooperative form makes it possible for the upstream firm to credibly commit to deliveries.

Keywords: Cooperative; Volume control; Holdup (search for similar items in EconPapers)
JEL-codes: L22 L23 Q13 Q42 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:181:y:2021:i:c:p:156-168

DOI: 10.1016/j.jebo.2020.11.036

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