Consumer Cooperatives and Welfare in a Mixed Oligopoly
AbstractConsumer co-operatives constitute a highly successful example of democratic forms of enterprises operating in developed countries. They are usually organized as medium or large-scale firms competing with profit seeking firms in retail industries. In this paper we model such a situation as a mixed oligopoly in which consumer co-operatives maximize consumer-members' utilities and distribute them a patronage rebate on their goods purchase. We show that when consumers possess quasilinear preferences over a bundle of symmetrically differentiated goods and firms operate with a linear technology, the presence of consumer co-operatives positively a¤ects all industries output and social welfare. The effect of Co-ops on welfare is shown to be more significant when goods are either complements or highly di¤erentiated and when competition is à la Cournot rather than à la Bertrand.
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Bibliographic InfoPaper provided by University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini in its series Working Papers with number 1010.
Length: 28 pages
Date of creation: 2010
Date of revision: 2010
Consumer Co-operatives; Profit-maximizing Firms; Mixed Oligopoly.;
Find related papers by JEL classification:
- L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
- L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-07-24 (All new papers)
- NEP-COM-2010-07-24 (Industrial Competition)
- NEP-IND-2010-07-24 (Industrial Organization)
- NEP-MKT-2010-07-24 (Marketing)
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.:
- de Fraja, Giovanni & Delbono, Flavio, 1990. " Game Theoretic Models of Mixed Oligopoly," Journal of Economic Surveys, Wiley Blackwell, vol. 4(1), pages 1-17.
- Marco Marini & Alberto Zevi, 2011.
"Just One Of Us: Consumers Playing Oligopoly In Mixed Markets,"
0111, CREI Università degli Studi Roma Tre, revised 2011.
- Marco Marini & Alberto Zevi, 2011. "‘Just one of us’: consumers playing oligopoly in mixed markets," Journal of Economics, Springer, vol. 104(3), pages 239-263, November.
- 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.
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