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A Model of a Bargaining Cooperative
Author(s) -
Ladd George W.
Publication year - 1974
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1238603
Subject(s) - maximization , marginal revenue , order (exchange) , production (economics) , revenue , microeconomics , marginal cost , raw material , service (business) , economics , computer science , industrial organization , mathematical economics , economy , chemistry , accounting , organic chemistry , finance
This paper analyzes behavior of a cooperative of raw material producers. The cooperative sells a production input to producers, provides a “free” service to members, and bargains with processors for raw material price. One analysis assumes the cooperative's objective is maximization of the raw material price received by members. Another assumes the objective is maximization of quantity marketed through the cooperative. The cooperative has three instruments to manipulate to attain its objective. First‐order maximization conditions for the two objectives are quite different from each other and from “marginal cost equals marginal revenue” conditions.