Imperfect Competition in Agricultural Markets and the Role of Cooperatives: A Spatial Analysis

Richard J. Sexton

American Journal of Agricultural Economics, 1990, vol. 72, issue 3, 709-720

Abstract: Important characteristics of many agricultural markets are costly to transport raw products and relatively few processors, one or more of which is often a cooperative. This paper analyzes pricing behavior in these oligopsonistic, spatial markets and focuses specifically upon the conjecture that cooperatives may have a procompetitive effect on the behavior of rival non-co-op processors. The existence and magnitude of a procompetitive effect is shown to depend upon a number of structural and strategic factors including competitive relations among the non-co-op processors and a cooperative's membership and pricing policies.

Date: 1990
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