A Theory of Co-Operatives

Organizational structure, redistribution and the endogeneity of cost: Cooperatives, investor-owned firms and the cost of procurement

“…The cooperative is assumed to maximize an aggregate weighted welfare function defined over the profits earned by its agent members (see Carson, 1977 for a similar set-up). The use of a weighted welfare function is designed to capture the outcome of the collective decision making process that is present in the cooperative.…”

Do Policy Measures Impact the Position and Performance of Farmers' Cooperatives in the Eu?

“…Obviously, also other indicators can be identified which measure the importance of cooperatives in a sector. Examples are the size of the total output, membership (Albaek and Schultz, 1998), profit or even return to patronage 1 (Enke, 1945;Carson, 1979;Helmberger and Hoss, 1962). These indicators cannot be measured unambiguously for each sector in each country however.…”

Leximin

“…Although this is not widely noted, 2) and 3) together imply that worker-cooperatives have the advantage over conventional firms in terms of factor-neutral productivity, and this generally contradicts Ward's assumption that the worker cooperative and the capitalist firm would have access to the same productive technology. Early theoretical work focused on the realism of the backward-sloping supply curves (Robinson 1967;Domar 1966) and on the realism of the assumptions of equal access to capital and technology (Carson 1977;Jensen & Meckling 1979;Furubotn & Pejovich 1970;Furubotn 1976), although these critics assume that the conventional firm would have the productivity advantage.…”

“…Critics from the property rights school routinely assume that effort and labor productivity will be lower in worker cooperatives than in conventional firms. (Furubotn & Pejovich 1970;Furubotn 1976Furubotn , 1980Carson 1977;Jensen & Meckling 1979) While their methods generally are mathematically informal (and therefore inconclusive) the line of reasoning here is clear and easily put into mathematically rigorous form. First, they reject as mistaken the characterization of the labor input as undifferentiated.…”