This paper develops a sequential game theoretic model of heterogeneous producers to examine the effect of cooperative involvement on process innovation activity in the agricultural input-supplying sector. Analytical results show that the involvement of an open-membership cooperative in process innovation activity can be welfare enhancing and, thus, socially desirable. The presence of the co-op can increase the arrival rate of process innovations and productivity growth while reducing the price of agricultural inputs. The effectiveness of the co-op in innovation activity is determined by its initial market share and the size of the innovation costs.
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Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2003 Annual meeting, July 27-30, Montreal, Canada with number
22193.
Length: Date of creation: 2003 Date of revision: Handle: RePEc:ags:aaea03:22193
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