IDEAS home Printed from https://ideas.repec.org/p/ags/aaea06/21223.html
   My bibliography  Save this paper

The Effect Of Cooperatives On Product Innovation In The Agri-Food System

Author

Listed:
  • Drivas, Kyriakos
  • Giannakas, Konstantinos

Abstract

This paper develops a game-theoretic model of heterogeneous consumers to analyze the effect of cooperative involvement on quality-enhancing product innovation activity, the pricing of food products, and the welfare of the groups involved in the context of a mixed duopoly where an openmembership consumer co-op competes with an IOF. Analytical results show that the involvement of the member welfare-maximizing co-op in R&D can be quality and welfare enhancing by increasing the arrival rate of product innovations and reducing the prices of food products. The effectiveness of the coop is shown to depend on the nature of product differentiation and the relative quality of its products, the degree of consumer heterogeneity, and the size of innovation costs.

Suggested Citation

  • Drivas, Kyriakos & Giannakas, Konstantinos, 2006. "The Effect Of Cooperatives On Product Innovation In The Agri-Food System," 2006 Annual meeting, July 23-26, Long Beach, CA 21223, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea06:21223
    DOI: 10.22004/ag.econ.21223
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/21223/files/sp06dr01.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.21223?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Richard J. Sexton & Terri A. Sexton, 1987. "Cooperatives as Entrants," RAND Journal of Economics, The RAND Corporation, vol. 18(4), pages 581-595, Winter.
    2. Kostas Karantininis & Angelo Zago, 2001. "Endogenous Membership in Mixed Duopsonies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(5), pages 1266-1272.
    3. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    4. David A. Malueg & Shunichi O. Tsutsui, 1997. "Dynamic R&D Competition with Learning," RAND Journal of Economics, The RAND Corporation, vol. 28(4), pages 751-772, Winter.
    5. Albaek, Svend & Schultz, Christian, 1998. "On the relative advantage of cooperatives," Economics Letters, Elsevier, vol. 59(3), pages 397-401, June.
    6. Konstantinos Giannakas & Murray Fulton, 2005. "Process Innovation Activity in a Mixed Oligopoly: The Role of Cooperatives," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(2), pages 406-422.
    7. Murray Fulton & Konstantinos Giannakas, 2001. "Organizational Commitment in a Mixed Oligopoly: Agricultural Cooperatives and Investor-Owned Firms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(5), pages 1258-1265.
    8. Fudenberg, Drew & Gilbert, Richard & Stiglitz, Joseph & Tirole, Jean, 1983. "Preemption, leapfrogging and competition in patent races," European Economic Review, Elsevier, vol. 22(1), pages 3-31, June.
    9. Delbono, Flavio, 1989. "Market Leadership with a Sequence of History Dependent Patent Races," Journal of Industrial Economics, Wiley Blackwell, vol. 38(1), pages 95-101, September.
    10. Segerstrom, Paul S & Anant, T C A & Dinopoulos, Elias, 1990. "A Schumpeterian Model of the Product Life Cycle," American Economic Review, American Economic Association, vol. 80(5), pages 1077-1091, December.
    11. Berit Tennbakk, 1995. "Marketing Cooperatives In Mixed Duopolies," Journal of Agricultural Economics, Wiley Blackwell, vol. 46(1), pages 33-45, January.
    12. Richard J. Sexton, 1990. "Imperfect Competition in Agricultural Markets and the Role of Cooperatives: A Spatial Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(3), pages 709-720.
    13. Aoki, Reiko, 1991. "R&D Competition for Product Innovation: An Endless Race," American Economic Review, American Economic Association, vol. 81(2), pages 252-256, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Antonio Usai & Daniele Porcheddu & Veronica Scuotto & Jean-Paul Susini, 2020. "Converting Shelf-Based Scarcity into Innovation by Adopting Customer-Focused Innovation Approach," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 11(1), pages 70-83, March.
    2. Stephen C. Smith & Jonathon Rothbaum, 2013. "Cooperative in a Global Economy: Key Economic Issues, Recent Trends, and Potential for Development," Working Papers 2013-6, The George Washington University, Institute for International Economic Policy.
    3. TEKAM OUMBE, Honoré & Pilag Kakeu, Charles Bertin, 2019. "ENTREPRENEURIAT ET CAPACITE D’INNOVATION, CAS DES PME AGROALIMENTAIRES. Une évidence empirique sur données camerounaises et implications pour une politique de développement sectoriel [ENTREPRENEURS," MPRA Paper 92377, University Library of Munich, Germany.
    4. Pascucci, Stefano & Royer, Annie & Bijman, Jos, 2011. "Should I Make or Should I Buy? Innovation Strategies and Governance Structures in the Italian Food Sector," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 2(2), pages 1-14, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kyriakos Drivas & Konstantinos Giannakas, 2010. "The Effect of Cooperatives on Quality‐Enhancing Innovation," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(2), pages 295-317, June.
    2. Giannakas, Konstantinos & Fulton, Murray E., 2003. "Agricultural Cooperatives And Cost-Reducing R&D In The Agri-Food System," 2003 Annual meeting, July 27-30, Montreal, Canada 22193, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Marco A. MARINI & Paolo POLIDORI & Desiree TEOBALDELLI & Alberto ZEVI, 2015. "Welfare Enhancing Coordination In Consumer Cooperatives Under Mixed Oligopoly," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 86(3), pages 505-527, September.
    4. Drivas, Kyriakos & Giannakas, Konstantinos, 2008. "Process Innovation Activity in a Mixed Oligopsony: The Role of Marketing Cooperatives," Journal of Rural Cooperation, Hebrew University, Center for Agricultural Economic Research, vol. 36(2), pages 1-26.
    5. 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.
    6. Bontems, Philippe & Fulton, Murray, 2009. "Organizational structure, redistribution and the endogeneity of cost: Cooperatives, investor-owned firms and the cost of procurement," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 322-343, October.
    7. Agbo, Maxime & Rousselière, Damien & Salanié, Julien, 2015. "Agricultural marketing cooperatives with direct selling: A cooperative–non-cooperative game," Journal of Economic Behavior & Organization, Elsevier, vol. 109(C), pages 56-71.
    8. Maxime Agbo & Damien Rousselière & Julien Salanié, 2013. "A Theory of Agricultural Marketing Cooperatives with Direct selling," Working Papers halshs-00906894, HAL.
    9. repec:hal:journl:halshs-01098762 is not listed on IDEAS
    10. repec:vuw:vuwscr:18942 is not listed on IDEAS
    11. Giannakas, Konstantinos & Fulton, Murray E., 2002. "Innovation Activity In A Mixed Oligopoly: The Role Of Co-Operatives," 2002 Annual meeting, July 28-31, Long Beach, CA 19771, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. 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.
    13. Onofri, Alejandro & Giannakas, Konstantinos, 2001. "The Strategic Role Of Public R&D In Agriculture," 2001 Annual meeting, August 5-8, Chicago, IL 20699, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    14. 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.
    15. Michael Kopel & Marco Marini, 2014. "Strategic delegation in consumer cooperatives under mixed oligopoly," Journal of Economics, Springer, vol. 113(3), pages 275-296, November.
    16. Chennak, Ahmed & Giannakas, Konstantinos, 2023. "Licensing in the agri-food system: The role of cooperatives," 2023 Annual Meeting, July 23-25, Washington D.C. 335916, Agricultural and Applied Economics Association.
    17. Liang, Qiao & Hendrikse, George, 2016. "Pooling and the yardstick effect of cooperatives," Agricultural Systems, Elsevier, vol. 143(C), pages 97-105.
    18. Panagiotou, Dimitrios, 2019. "Pricing behavior in a mixed spatial duopsony with an agricultural cooperative under asymmetric information," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 0(Issue 1).
    19. Ahmet Candemir & Sabine Duvaleix & Laure Latruffe, 2021. "Agricultural Cooperatives And Farm Sustainability – A Literature Review," Journal of Economic Surveys, Wiley Blackwell, vol. 35(4), pages 1118-1144, September.
    20. Panos Fousekis, 2016. "Member Coordination Costs and Spatial Entry Deterrence in a Mixed Duopsony with a Cooperative," Spatial Economic Analysis, Taylor & Francis Journals, vol. 11(3), pages 340-354, July.
    21. Azzeddine Azzam & Hans Andersson, 2008. "Measuring Price Effects of Concentration in Mixed Oligopoly: An Application to the Swedish Beef-slaughter Industry," Journal of Industry, Competition and Trade, Springer, vol. 8(1), pages 21-31, March.
    22. Hueth, Brent & Marcoul, Philippe, 2007. "The Cooperative Firm as Monitored Credit," Staff Paper Series 508, University of Wisconsin, Agricultural and Applied Economics.

    More about this item

    Keywords

    Agribusiness;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aaea06:21223. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.