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Internal governance and member investment behavior in energy cooperatives: An experimental approach

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  • Höfer, Hanna-Helena
  • Rommel, Jens

Abstract

Cooperatives may become increasingly important as suppliers of electricity from renewable resources. Numerous governance models exist for establishing a renewable energy cooperative. Since members self-select into the organization, causal links between methods of internal governance and member characteristics are difficult to identify. We demonstrate how economic experiments can address this problem. In a simple social-dilemma game, we study the impact of heterogeneity in wealth on investment in a jointly owned enterprise under two different governance models. We do not find that member heterogeneity or governance model affect investment levels. A participant's endowment appears to be the most important factor explaining variation in investment. Good knowledge of cooperative governance has a positive impact on investment in the game and good knowledge of game theory has a negative impact on investment in the game. Future research should investigate the effect of the distribution of control rights on the performance of cooperative enterprises.

Suggested Citation

  • Höfer, Hanna-Helena & Rommel, Jens, 2015. "Internal governance and member investment behavior in energy cooperatives: An experimental approach," Utilities Policy, Elsevier, vol. 36(C), pages 52-56.
  • Handle: RePEc:eee:juipol:v:36:y:2015:i:c:p:52-56
    DOI: 10.1016/j.jup.2015.09.003
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    References listed on IDEAS

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    Cited by:

    1. Yildiz, Özgür, 2016. "Public-private partnerships, incomplete contracts, and distributional fairness – when payments matter," MPRA Paper 74552, University Library of Munich, Germany.

    More about this item

    Keywords

    Energy transition; Germany; Land-use conflicts and governance;

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • P13 - Economic Systems - - Capitalist Systems - - - Cooperative Enterprises

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