Agricultural cooperatives and quality-enhancing R&D in the agri-food system

Authors:
Kyriakos Drivas
Giannakas, Konstantinos
Type: Conference Paper
Journal title: Seminar Paper
Year of publication: 2006
Source: AgEcon
Collected from: AGRIS
Subject:
products
cooperatives
agribusiness and cooperatives
Description: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 co- op 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 .
 

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