IDEAS home Printed from
   My bibliography  Save this paper

The Performance Of Agricultural Marketing Cooperatives In Differentiated Product Markets


  • Ronald W. COTTERILL



Recent empirical work suggests that cooperative presence in differentiated product markets lowers the consumer prices of all brands. This paper focuses on the theoretical basis for this competitive yardstick effect by cooperatives. It identifies two market structures where the competitive yardstick theorem for cooperatives can be extended from farmer-first handler markets to differentiated consumer product markets. They are (1) oligopoly with significant barriers to entry and (2) monopolistic competition with entry but only non-price competition. In the latter, the cooperative can also ensure that the socially optimal number of brands (product variety) is provided by the industry. The theory also provides useful guidance for determining when supply-limiting conduct in differentiated product markets should be challenged as undue price enhancement under the Capper-Volstead law.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Ronald W. COTTERILL, 1997. "The Performance Of Agricultural Marketing Cooperatives In Differentiated Product Markets," Department of Resource Economics Regional Research Project 964, University of Massachusetts.
  • Handle: RePEc:wop:marerp:964

    Download full text from publisher

    File URL:
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    1. Brander, James A & Eaton, Jonathan, 1984. "Product Line Rivalry," American Economic Review, American Economic Association, vol. 74(3), pages 323-334, June.
    2. Royer, Jeffrey S. & Bhuyan, Sanjib, 1995. "Forward Integration by Farmer Cooperatives: Comparative Incentives and Impacts," Journal of Cooperatives, NCERA-210, vol. 10.
    3. Cotterill, Ronald W. & Haller, Lawrence E., 1994. "Market Strategies in Branded Dairy Product Markets," Research Reports 25149, University of Connecticut, Food Marketing Policy Center.
    4. Ronald W. Cotterill & Andrew W. Franklin & Li Yu Ma, 1996. "Measuring Market Power Effects in Differentiated Product Industries: An Application to the Soft Drink Industry," Food Marketing Policy Center Research Reports 032, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    5. Schmalensee, Richard, 1982. "Product Differentiation Advantages of Pioneering Brands," American Economic Review, American Economic Association, vol. 72(3), pages 349-365, June.
    6. Neven, Damien, 1985. "Two Stage (Perfect) Equilibrium in Hotelling's Model," Journal of Industrial Economics, Wiley Blackwell, vol. 33(3), pages 317-325, March.
    7. Rogers, Richard T. & Marion, Bruce W., 1990. "Food Manufacturing Activities of the Largest Agricultural Cooperatives: Market Power and Strategic Behavior Implications," Journal of Agricultural Cooperation, National Council of Farmer Cooperatives, vol. 5.
    8. E. V. Jesse & B. W. Marion & A. C. Manchester & Aaron. C. Johnson, 1982. "Interpreting and Enforcing Section 2 of the Capper-Volstead Act," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 64(3), pages 431-443.
    Full references (including those not matched with items on IDEAS)


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

    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. Richard T. Rogers, 2001. "Structural change in U.S. food manufacturing, 1958-1997," Agribusiness, John Wiley & Sons, Ltd., vol. 17(1), pages 3-32.
    3. Royer, Jeffrey S., 2014. "The Neoclassical Theory of Cooperatives: Part II," Journal of Cooperatives, NCERA-210, vol. 28.
    4. Noel, Jay E. & Ahern, James & Schaffner, David J. & Johnson, Jill & Muelrath, Kristina & Schroeder, Kyle, 2002. "The Economic Feasibility of Forming a California Wheat Growers’ Cooperative," Research Reports 143136, University of California, Davis, Center for Cooperatives.


    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:wop:marerp:964. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Krichel). General contact details of provider: .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.