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Duality theorems summarising some unambiguous qualitative comparative static results for processing cooperatives - The restricted profit function applied

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  • Senhaji, Arvid

Abstract

Cooperatives can broadly be divided into processing and marketing cooperatives on the one hand, and purchasing and supplying cooperatives on the other. In the early economic cooperative literature it is suggested that a processing cooperative may pursue either one of the following four objectives: a) Maximisation of the net average revenue product, b) Maximisation of the dividend, c) Maximisation of the processing cooperative’s profit, and d) Maximisation of members’ producer surplus plus the cooperative’s profit. The corresponding objectives for purchasing and supplying cooperatives are: e) Minimisation of the purchasing price, f) Maximisation of the dividend, g) Maximisation of the purchasing cooperative’s profit, and h) Maximisation of members’ consumer surplus plus the cooperative’s profit. This article analyses processing cooperative behaviour within a duality framework based on the restricted profit function. The five derived duality theorems concisely summarise the unambiguous qualitative comparative static results for a cooperative’s ordinary or relative choice functions, depending on which objective the daily manager is assumed to pursue.

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  • Senhaji, Arvid, 2008. "Duality theorems summarising some unambiguous qualitative comparative static results for processing cooperatives - The restricted profit function applied," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44374, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaae08:44374
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    1. Sexton, Richard J. & Wilson, Brooks M. & Wann, Joyce J., 1989. "Some Tests Of The Economic Theory Of Cooperatives: Methodology And Application To Cotton Ginning," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 14(01), July.
    2. G. E. Boyle, 1998. "A Duality Approach to Testing the Economic Behaviour of Dairy-Marketing Co-operatives: The Case of Ireland," Economics, Finance and Accounting Department Working Paper Series n800798, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
    3. Frank Robotka, 1947. "A Theory of Cooperation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 29(1), pages 94-114.
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    Keywords

    Processing cooperative behaviour; Duality theory; Unambiguous comparative static results; Agricultural and Food Policy;

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