In cooperatives, allocation of competences results in an organizational form which differs from other enterprises. The members partly remain independent in doing their business and delegate only a part of their competence to the jointly owned firm. Therefore a cooperative is neither a single firm nor a group of fully independent entities. In this paper the conduct of the hybrid organization is characterized by the concept of "conjectural variations". I show for two different objectives of the cooperative that it is possible to patronise members in competition with a profit maximizing firm. The choice of decentralization of decision making is crucial for the results. It can be seen as a credible commitment to the behaviour of the cooperative and it has therefore important influence on the outcomes: In a mixed duopoly with a cooperative patronizing their members the results are more competitive than in a pure duopoly.
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Paper provided by Universitaet Augsburg, Institute for Economics in its series Discussion Paper Series with number
243.
Find related papers by JEL classification: D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Dixit, Avinash K, 1986.
"Comparative Statics for Oligopoly,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(1), pages 107-22, February.
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