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The Formation of Cooperatives: A Game‐Theoretic Approach with Implications for Cooperative Finance, Decision Making, and Stability
Author(s) -
Sexton Richard J.
Publication year - 1986
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 - 10.2307/1241423
Subject(s) - core (optical fiber) , stability (learning theory) , microeconomics , purchasing , incentive , economics , cooperative game theory , mathematical economics , similarity (geometry) , game theory , computer science , operations management , artificial intelligence , telecommunications , machine learning , image (mathematics)
This paper departs from the traditional organization‐oriented approach to cooperative analysis. It exploits cooperation's functional similarity to vertical integration to examine individuals' incentives to form cooperatives. A model of formation of a purchasing cooperative is presented and developed as an n ‐person game with the core as a solution concept. Core existence is examined for both single‐ and multiple‐cooperative configurations, and cooperative finance methods are examined relative to finding core‐compatible allocation rules. The results provide insight into a cooperative's equilibrium output, stability, decision making, financing methods, and choice of open or restricted membership.