‘Just one of us’: consumers playing oligopoly in mixed markets
AbstractConsumer 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 diÂ¤erentiated goods and ?rms operate with a linear technology, the presence of consumer cooperatives aÂ¤ects all industries output and social welfare positively. The eÂ¤ect of cooperatives on welfare proves more signi?cant when goods are either complements or highly diÂ¤erentiated and when competition is Ã la Cournot rather than Ã la Bertrand.
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Bibliographic InfoArticle provided by Springer in its journal Journal of Economics.
Volume (Year): 104 (2011)
Issue (Month): 3 (November)
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Web page: http://www.springerlink.com/link.asp?id=108909
Consumer cooperatives; Profit-maximizing firms; Mixed oligopoly; L13; L21; L22; L31; L33; L81; P13;
Other versions of this item:
- Marco, Marini & Alberto, Zevi, 2010. "'Just one of us': Consumers playing oligopoly in mixed markets," MPRA Paper 31213, University Library of Munich, Germany, revised 30 May 2011.
- Marco Marini & Alberto Zevi, 2011. "Just One Of Us: Consumers Playing Oligopoly In Mixed Markets," Working Papers 0111, CREI Università degli Studi Roma Tre, revised 2011.
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
- P13 - Economic Systems - - Capitalist Systems - - - Cooperative Enterprises
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
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