Agricultural cooperatives and quality-enhancing R&D in the agri-food system

Kyriakos Drivas and Konstantinos Giannakas ()

No 10075, 98th Seminar, June 29-July 2, 2006, Chania, Crete, Greece from European Association of Agricultural Economists

Abstract: This paper develops a game - theoretic model of heterogeneous consumers to analyze the effect of cooperative involvement on quality- enhancing product innovation activity, the pricing of food products, and the welfare of the groups involved in the context of a mixed duopoly where an openmembership consumer co- op competes with an IOF. Analytical results show that the involvement of the member welfare- maximizing co- op in R&D can be quality and welfare enhancing by increasing the arrival rate of product innovations and reducing the prices of food products. The effectiveness of the co- op is shown to depend on the nature of product differentiation and the relative quality of its products, the degree of consumer heterogeneity, and the size of innovation costs .

Keywords: Agribusiness; Research and Development/Tech Change/Emerging Technologies (search for similar items in EconPapers)
Pages: 36
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae98:10075

DOI: 10.22004/ag.econ.10075

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