Cooperative Forward Integration in Oligopsonistic Markets

Jeffrey S. Royer
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Jeffrey S. Royer: University of Nebraska

Chapter Chapter 10 in Vertical Markets and Cooperative Hierarchies, 2007, pp 169-194 from Springer

Abstract: Abstract Abstract. A model of a two-stage vertical market structure consisting of producers, processors, and acooperative is developed to analyze the market incentives agricultural cooperatives may have forintegrating forward into processing activities and the comparative impacts of cooperative forwardintegration on producers and consumers when processors are alternately characterized by Cournot,competitive, and collusive behavior. Results suggest that cooperatives do not have an incentive tointegrate forward in competitive markets. In markets with some degree of market power, the potential forcooperative forward integration is linked to the cooperative’s ability to restrict the output of its membersto optimal levels.

Keywords: Market Power; Consumer Surplus; Market Size; Vertical Integration; Downstream Firm (search for similar items in EconPapers)
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-1-4020-5543-0_10

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DOI: 10.1007/1-4020-5543-0_10

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