Li, Ziran; Qian, Hang; Jacobs, Keri
WP #15018, October 2015
The lack of consensus on the objective of the agricultural cooperative (co-op) has been an obstacle for the advancement of co-op theory and empirical implications. This paper develops a theoretical model to compare pricing behavior of co-op and for-profit investor owned firm in the context of mixed oligopoly with uncertain future profits. We focus specifically on the change in market equilibrium as the objective of cooperative firm moves along the objective spectrum from profit-maximization towards maximization of member benefit.
JEL Classification: D4, D43, L1, L2, Q1