Autore
Waldmann, Robert

Titolo
Cooperatives with privately optimal price indexed debt increase membership when demand increases
Periodico
European University Institute of Badia Fiesolana (Fi). Department of Economics - Working papers
Anno: 1994 - Fascicolo: 1 - Pagina iniziale: 1 - Pagina finale: 11

In a simple model of a cooperative, an increase in the price offered for the cooperative's product causes a reduction in m em bership and production. This perverse response called the Ward effect is often proposed as an explanation of why cooperatives are rare. When the model is augmented by allowing the cooperative to issue debt instruments which pay an arbitrary continuous function of the price of their product the Ward effect is reversed, that is, the cooperative has an upward sloping supply curve. In the model presented below, this results from the privately optim al decisions of a core group which is not concerned about efficiency or employment.



Testo completo: http://hdl.handle.net/1814/481

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