Seminars/Workshops
Diogo Souza Monteiro (Newcastle University), 23 Mar 2017, 4:30pm, DUBS 453
Speaker: Diogo Souza Monteiro, Newcastle University
Title: Deterring free-riding on quality products in cooperatives: Lessons from an experiment
Date & Time: 23 March 2017, Thursday, 4:30-5:45 pm
Venue: Durham University Business School, room 453
Millhill Ln, Durham DH1 3LB
Abstract:
Cooperatives, particularly the wine cooperatives, are increasingly investing on quality and developing their own collective premium brands. Moral hazard among cooperative members can result in free-riding on quality product. This empirical analysis investigates the free-riding on quality product in cooperatives. The experimental analysis is based on a game built to represent the specific context of cooperatives, that nests a public good game and a multi-player assurance game. The magnitude of the collective rent depends on the joint contributions of members and is distributed back equally to all group members. Free-riding is imperfectly monitored. The results suggest that to deter free-riding, a cooperative may sub-divide production into a number of smaller divisions where collective rents determined through profit-sharing arrangements can be organized among smaller groups. Moreover, the analysis reveals that cooperation is better in cooperatives where members benefit from financial advantages.
Last modified: Thu, 09 Mar 2017 17:56:09 GMT
