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Cooperative Forward Integration in Oligopsonistic Markets

In: Vertical Markets and Cooperative Hierarchies

Author

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  • Jeffrey S. Royer

    (University of Nebraska)

Abstract

Abstract. A model of a two-stage vertical market structure consisting of producers, processors, and acooperative is developed to analyze the market incentives agricultural cooperatives may have forintegrating forward into processing activities and the comparative impacts of cooperative forwardintegration on producers and consumers when processors are alternately characterized by Cournot,competitive, and collusive behavior. Results suggest that cooperatives do not have an incentive tointegrate forward in competitive markets. In markets with some degree of market power, the potential forcooperative forward integration is linked to the cooperative’s ability to restrict the output of its membersto optimal levels.

Suggested Citation

  • Jeffrey S. Royer, 2007. "Cooperative Forward Integration in Oligopsonistic Markets," Springer Books, in: Vertical Markets and Cooperative Hierarchies, chapter 0, pages 169-194, Springer.
    • Handle: RePEc:spr:sprchp:978-1-4020-5543-0_10
    DOI: 10.1007/1-4020-5543-0_10
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    Cited by:

    1. Royer, Jeffrey S., 2012. "Implications of the Cooperative Organizational Form for Vertical Expansion," Journal of Rural Cooperation, Hebrew University, Center for Agricultural Economic Research, vol. 40(2), pages 1-20.

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