MEMBERS' FINANCIAL EVALUATION AND COOPERATIVES' DECISION PROCESSES

The paper presents an analysis of cooperative investment decision based on the coalition theoretical framework (Staatz 1983, 1987, 1989). According to this framework, cooperatives can be considered as coalitions of groups with different interests. The behavior of any cooperative is determined by the interaction of its many groups (different types of farmers, managers, lenders, input suppliers, buyers, etc.) with different objectives. The group that can impose its will on the coalition will determine the cooperative's strategy. The other parties may accept this leadership, leave the cooperative or try to use their bargaining power to modify the final outcome. The paper discusses the impact of group bargaining on cooperatives' decision process. In particular, the paper addresses the issues related to the consequences of members' heterogeneity on cooperative efficiency. The proposed model utilizes tools from financial theory already successfully applied in the literature (Peterson 1992, Hendrikse 1998) providing a more detailed insight into the determinants of the cooperative decision process. The paper shows that cooperatives evaluate investments differently from IOFs due to the unique characteristics of their patrons compared to other types of investors.


Issue Date:
2000
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/11719
Total Pages:
24
Series Statement:
Staff Paper 00-8




 Record created 2017-04-01, last modified 2017-08-23

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