Influence Costs in Heterogeneous Cooperatives: A Formal Model of Sales Distortion

Peter Bogetoft and Henrik B. Olesen
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Henrik B. Olesen: Royal Veterinary and Agricultural University, Denmark

No 2002-05, CIE Discussion Papers from University of Copenhagen. Department of Economics. Centre for Industrial Economics

Abstract: Modern agricultural marketing cooperatives must implement farm-level differentiation to meet requirements from high-quality market segments, e.g. consumers focusing on animal welfare. This makes the cooperatives internally heterogeneous and increases the influence costs. In particular, the marketing of special high-quality products is a controversial issue for cooperatives, because different producer groups have different interests. The standard producers, who normally hold the majority vote in the cooperatives, are reluctant to promote the sale of specialty products and hereby increase the bargaining power of the specialty producers. We explore these arguments in a formal model.

Keywords: Cooperatives; Influence Costs; Market Innovation (search for similar items in EconPapers)
JEL-codes: D23 L23 Q13 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2002-11
New Economics Papers: this item is included in nep-ind
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: INFLUENCE COSTS IN HETEROGENEOUS COOPERATIVES: A FORMAL MODEL OF SALES DISTORTION (2003)
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