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Quality provision and governance structure variety: Pooling versus double markup

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  • Liang, Qiao
  • Hendrikse, George W. J.
  • Huang, Zuhui
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    Abstract

    This paper examines how farmers producing differentiated quality products choose different governance structures in a non-cooperative game between farmers, enterprises, and consumers. A cooperative and an IOF (investor owned firm) coexist in equilibrium and low quality is delivered by the cooperative. The trade-off between pooling and the elimination of the double markup determines the attractiveness of cooperatives compared to IOFs. --

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    File URL: http://econstor.eu/bitstream/10419/52694/1/676455646.pdf
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    Bibliographic Info

    Paper provided by Leib­niz Institute of Agricultural Development in Central and Eastern Europe (IAMO) in its series IAMO Forum 2010: Institutions in Transition – Challenges for New Modes of Governance with number 52694.

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    Date of creation: 2010
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    Handle: RePEc:zbw:iamo10:52694

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    Related research

    Keywords: Quality; Cooperatives; Investor-Owned Firms;

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    1. Deepananda Herath & Zuhair Hassan & Spencer Henson, 2007. "Adoption of Food Safety and Quality Controls: Do Firm Characteristics Matter? Evidence from the Canadian Food Processing Sector," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 55(3), pages 299-314, 09.
    2. Anneleen Vandeplas & Bart Minten, 2011. "Food quality in domestic markets of developing economies:A comparative study of two countries," LICOS Discussion Papers 28911, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    3. John M. Antle, 1999. "The New Economics of Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(5), pages 993-1010.
    4. Swinnen, Johan F.M. & Rozelle, Scott & Xiang, Tao & Vandemoortele, Thijs, 2009. "A Theory of Standards-Driven Rural Development," 2009 Conference, August 16-22, 2009, Beijing, China 51475, International Association of Agricultural Economists.
    5. Herbst, P. & Prüfer, J., 2007. "Firms, Nonprofits, and Cooperatives: A Theory of Organizational Choice," Discussion Paper 2007-7, Tilburg University, Center for Economic Research.
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