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The (Bargaining) Power of Incentives: Cooperatives, For-Profit Firms and the Cost of Procurement

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  • Bontems, Philippe
  • Fulton, Murray E.

Abstract

In this paper, we show formally that cooperatives can possess an informational - and hence cost - advantage compared to For Profit Firms. This advantage is directly linked to the goal alignment between the cooperative and its members, and is influenced by the extent of income redistribution between members. Hence the standard practice of modeling the cooperative and the FPF as having identical cost structures appears to be theoretically unsound.

Suggested Citation

  • Bontems, Philippe & Fulton, Murray E., 2004. "The (Bargaining) Power of Incentives: Cooperatives, For-Profit Firms and the Cost of Procurement," 2004 Annual meeting, August 1-4, Denver, CO 20073, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea04:20073
    DOI: 10.22004/ag.econ.20073
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    Cited by:

    1. Evans, Lewis & Meade, Richard, 2005. "The Role and Significance of Cooperatives in New Zealand Agriculture, A Comparative Institutional Analysis," Working Paper Series 3847, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    2. Evans, Lewis & Meade, Richard, 2005. "The Role and Significance of Cooperatives in New Zealand Agriculture, A Comparative Institutional Analysis," Working Paper Series 18942, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    3. repec:vuw:vuwscr:18942 is not listed on IDEAS

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    Keywords

    Agribusiness;

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