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JUST ONE OF US: CONSUMERS PLAYING OLIGOPOLY IN MIXED MARKETS

Marco Marini () and Alberto Zevi ()
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Alberto Zevi: University of Urbino "Carlo Bo", University of Roma "La Sapienza"

No 111, Working Papers from CREI Università degli Studi Roma Tre

Abstract: Consumer cooperatives constitute a highly successful example of democratic forms of enterprises operating in developed countries. They are usually organized as medium and large-scale ?rms competing with pro?t-maximizing ?rms in retail industries. This paper models such situation as a mixed oligopoly in which consumer cooperatives maximize the utility of consumer-members and distribute them a share of the pro?t equal to the ratio of their individual expenditure to the ?rm total sales. We show that when consumers possess quasilinear preferences over a bundle of symmetrically di¤erentiated goods and ?rms operate with a linear technology, the presence of consumer cooperatives a¤ects all industries output and social welfare positively. The e¤ect of cooperatives on welfare proves more signi?cant when goods are either complements or highly di¤erentiated and when competition is à la Cournot rather than à la Bertrand.

Keywords: Consumer Cooperatives; Pro?t-maximizing Firms; Mixed Oligopoly (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cis, nep-com and nep-mkt
Date: 2011, Revised 2011
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http://host.uniroma3.it/centri/crei/pubblicazioni/ ... 011/CREI_01_2011.pdf First version, 2011 (application/pdf)

Related works:
Journal Article: ‘Just one of us’: consumers playing oligopoly in mixed markets (2011) Downloads
Working Paper: 'Just one of us': Consumers playing oligopoly in mixed markets (2011) Downloads
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