Free-riding on product quality in cooperatives: Lessons from an experiment

Autor: Olivier Bonroy, Diogo Monteiro, Alexis Garapin, Stephen F. Hamilton
Přispěvatelé: Laboratoire d'Economie Appliquée de Grenoble (GAEL), Institut polytechnique de Grenoble - Grenoble Institute of Technology (Grenoble INP)-Institut National de la Recherche Agronomique (INRA)-Centre National de la Recherche Scientifique (CNRS)-Université Grenoble Alpes (UGA), Institut National de la Recherche Agronomique (INRA), Université Grenoble Alpes - Faculté d'Économie de Grenoble (UGA UFR FEG), Université Grenoble Alpes (UGA), California Polytechnic State University [San Luis Obispo] (CAL POLY), Newcastle University [Newcastle], School of Natural and Environmental Sciences, Laboratoire d'Economie Appliquée de Grenoble ( GAEL ), Institut polytechnique de Grenoble - Grenoble Institute of Technology ( Grenoble INP ) -Institut National de la Recherche Agronomique ( INRA ) -Centre National de la Recherche Scientifique ( CNRS ) -Université Grenoble Alpes ( UGA ), Institut National de la Recherche Agronomique ( INRA ), Université Grenoble Alpes - Faculté d'Économie de Grenoble ( UGA UFR FEG ), Université Grenoble Alpes ( UGA ), Orfalea College of Business, California Polytechnic State University [San Luis Obispo] ( CAL POLY ), Institut polytechnique de Grenoble - Grenoble Institute of Technology (Grenoble INP )-Centre National de la Recherche Scientifique (CNRS)-Institut National de la Recherche Agronomique (INRA)-Université Grenoble Alpes [2016-2019] (UGA [2016-2019]), Université Grenoble Alpes [2016-2019] (UGA [2016-2019]), Institut polytechnique de Grenoble - Grenoble Institute of Technology (Grenoble INP )-Institut National de la Recherche Agronomique (INRA)-Centre National de la Recherche Scientifique (CNRS)-Université Grenoble Alpes [2016-2019] (UGA [2016-2019])
Jazyk: angličtina
Rok vydání: 2019
Předmět:
JEL: C - Mathematical and Quantitative Methods/C.C9 - Design of Experiments/C.C9.C92 - Laboratory
Group Behavior
Economics and Econometrics
JEL: Q - Agricultural and Natural Resource Economics • Environmental and Ecological Economics/Q.Q1 - Agriculture/Q.Q1.Q13 - Agricultural Markets and Marketing • Cooperatives • Agribusiness
agricultural cooperatives
farm product
media_common.quotation_subject
Pooling
JEL: L - Industrial Organization/L.L6 - Industry Studies: Manufacturing/L.L6.L66 - Food • Beverages • Cosmetics • Tobacco • Wine and Spirits
JEL : C - Mathematical and Quantitative Methods/C.C9 - Design of Experiments/C.C9.C92 - Laboratory
Group Behavior
Microeconomics
collective action game
0502 economics and business
JEL : D - Microeconomics/D.D8 - Information
Knowledge
and Uncertainty/D.D8.D82 - Asymmetric and Private Information • Mechanism Design
[ SHS.ECO ] Humanities and Social Sciences/Economies and finances
Quality (business)
Product (category theory)
free-riding
050207 economics
JEL : L - Industrial Organization/L.L6 - Industry Studies: Manufacturing/L.L6.L66 - Food • Beverages • Cosmetics • Tobacco • Wine and Spirits
ComputingMilieux_MISCELLANEOUS
media_common
05 social sciences
free riding
[SDV.SA.AEP]Life Sciences [q-bio]/Agricultural sciences/Agriculture
economy and politics
Public good
Payment
experimental analysis
[SHS.ECO]Humanities and Social Sciences/Economics and Finance
Agricultural and Biological Sciences (miscellaneous)
JEL : Q - Agricultural and Natural Resource Economics • Environmental and Ecological Economics/Q.Q1 - Agriculture/Q.Q1.Q13 - Agricultural Markets and Marketing • Cooperatives • Agribusiness
product quality
Free riding
Incentive
probability of exclusion
Dividend
cooperative
050202 agricultural economics & policy
Business
JEL: D - Microeconomics/D.D8 - Information
Knowledge
and Uncertainty/D.D8.D82 - Asymmetric and Private Information • Mechanism Design
Zdroj: American Journal of Agricultural Economics
American Journal of Agricultural Economics, Oxford University Press (OUP), 2019, 101 (1-January), pp.89-108. ⟨10.1093/ajae/aay025⟩
American Journal of Agricultural Economics, Oxford University Press (OUP), 2018
ISSN: 0002-9092
1467-8276
Popis: This article was awarded "EAAE Quality of Research Discovery Award for 2019" in July 2020; International audience; An important issue facing marketing cooperatives is that the overall quality of the product depends on the quality of farm products provided by individual members. We conduct an experiment to empirically investigate producer incentives to free-ride on quality among the members of a marketing cooperative in a setting where the average quality provided by cooperative members results in a collective rent that is distributed back to members in a patronage dividend levied in proportion to the quantity produced. Hidden actions by cooperative members that impact quality are imperfectly monitored, but free-riding, when detected, results in exclusion from cooperative returns. The randomized payoff structure of our game results in a novel experimental design that nests public good games and multi-player assurance games. Our findings indicate that free-riding on product quality is deterred when (a) cooperatives base patronage dividends on quality outcomes of smaller groups; (b) payoffs from free-riding are randomized by the possibility of exclusion from cooperative returns; and (c) cooperatives distribute a larger share of returns to members through indirect payments such as capital pooling and cost-sharing arrangements unrelated to product quality.
Databáze: OpenAIRE
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