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

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  • Drivas, Kyriakos
  • Giannakas, Konstantinos

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 .

Suggested Citation

  • Drivas, Kyriakos & Giannakas, Konstantinos, 2006. "Agricultural cooperatives and quality-enhancing R&D in the agri-food system," 98th Seminar, June 29-July 2, 2006, Chania, Crete, Greece 10075, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaae98:10075
    DOI: 10.22004/ag.econ.10075
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    Cited by:

    1. Luo, Jianli & Guo, Hongdong & Jia, Fu, 2017. "Technological innovation in agricultural co-operatives in China: Implications for agro-food innovation policies," Food Policy, Elsevier, vol. 73(C), pages 19-33.

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