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Welfare Enhancing Coordination in Consumer Cooperatives under Mixed Oligopoly

  • Marco Marini

    ()

    (Department of Computer, Control and Management Engineering, Università "La Sapienza" Roma)

  • Paolo Polidori

    ()

    (Department of Law, University of Urbino “Carlo Bo”)

  • Alberto Zevi

    ()

    (University of Rome "La Sapienza".)

  • Désirée Teobaldelli

    ()

    (Department of Law, University of Urbino “Carlo Bo”)

The aim of this paper is to study the welfare e¤ects of consumer cooperatives in mixed oligopoly markets. We show that under decreasing returns to scale and su¢ ciently high market competition these rms can contribute more to social welfare when acting on behalf of all consumers rather than only one representative consumer. This is because, by coordinating the preferences of consumers, these rms reduce their excessive market output, helping the market to come closer to the rst-best. In all other cases we show that such consumers coordination is not required to improve welfare.

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File URL: http://www.econ.uniurb.it/RePEc/urb/wpaper/WP_13_03.pdf
File Function: First version, 2013
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Paper provided by University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini in its series Working Papers with number 1303.

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Length: 11 pages
Date of creation: 2013
Date of revision: 2013
Handle: RePEc:urb:wpaper:13_03
Contact details of provider: Web page: http://www.econ.uniurb.it/

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  1. Marco, Marini & Alberto, Zevi, 2010. "'Just one of us': Consumers playing oligopoly in mixed markets," MPRA Paper 31213, University Library of Munich, Germany, revised 30 May 2011.
  2. Arthur L. Bekenstein, 1943. "A Theoretical Analysis of Consumer Co-Operatives: The Managerial Problem," Journal of Political Economy, University of Chicago Press, vol. 51, pages 251.
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  4. David Kelsey & Frank Milne, 2010. "Takeovers and cooperatives: governance and stability in non-corporate firms," Journal of Economics, Springer, vol. 99(3), pages 193-209, April.
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  8. Richards, Timothy J. & Klein, Kurt K. & Walburger, Allan M., 1998. "Principal-Agent Relationships in Agricultural Cooperatives: An Empirical Analysis from Rural Alberta," Journal of Cooperatives, NCERA-210, vol. 13.
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  11. John M. Crespi & Tina L. Saitone & Richard J. Sexton, 2012. "Competition in U.S. Farm Product Markets: Do Long-Run Incentives Trump Short-Run Market Power?," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 34(4), pages 669-695.
  12. Michael Kopel & Marco Marini, 2012. "Optimal Compensation Structure In Consumer Cooperatives Under Mixed Oligopoly," Working Papers 0512, CREI Università degli Studi Roma Tre, revised 2012.
  13. V. James Rhodes, 1983. "The Large Agricultural Cooperative as a Competitor," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 65(5), pages 1090-1095.
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  16. 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.
  17. Mikami, Kazuhiko, 2003. "Market power and the form of enterprise: capitalist firms, worker-owned firms and consumer cooperatives," Journal of Economic Behavior & Organization, Elsevier, vol. 52(4), pages 533-552, December.
  18. Michael Kopel & Marco Marini, 2013. "Strategic Delegation In Consumer Cooperatives Under Mixed Oligopoly," Working Papers 1306, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2013.
  19. Michael E. Sykuta & Michael L. Cook, 2001. "A New Institutional Economics Approach to Contracts and Cooperatives," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(5), pages 1273-1279.
  20. Feng, L. & Hendrikse, G.W.J., 2011. "Chain Interdependencies, Measurement Problems, and Efficient Governance Structure: Cooperatives versus Publicly Listed Firms," ERIM Report Series Research in Management ERS-2011-001-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
  21. Tomas J. Philipson & Richard A. Posner, 2006. "Antitrust in the Not-For-Profit Sector," NBER Working Papers 12132, National Bureau of Economic Research, Inc.
  22. Fulton, Murray E., 1989. "Cooperatives in Oligopolistic Industries: The Western Canadian Fertilizer Industry," Journal of Agricultural Cooperation, National Council of Farmer Cooperatives, vol. 4.
  23. David Kelsey & Frank Milne, 2008. "Imperfect Competition and Corporate Governance," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 10(6), pages 1115-1141, December.
  24. Mikami, Kazuhiko, 2010. "Capital procurement of a consumer cooperative: Role of the membership market," Economic Systems, Elsevier, vol. 34(2), pages 178-197, June.
  25. 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.
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