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Journal of Agricultural Cooperation >
Volume 08, 1993 >
Please use this identifier to cite or link to this item:
http://purl.umn.edu/46390
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| Title: | Formula Price Contracts as an Alternative to Forward Integration by Farmer Cooperatives |
| Authors: | Royer, Jeffrey S.
Bhuyan, Sanjib |
| Issue Date: | 1993 |
| Abstract: | Firms may seek contractual alternatives to vertical integration in order to achieve
transactional economies or adjust for market imperfections. Blair and Kaserman have shown that under fixed-proportions production technology. Firms within bilateral and successive monopoly market structures can use formula price contracts
to achieve results economically equivalent to integration. This paper examines whether formula price contracts are a viable alternative to forward integration for farmer cooperatives. Analysis of a three-stage vertical market structure indicates that the conditions under which a cooperative assembler can use a formula price contract are more restrictive than those for an investor-owned firm. |
| URI: | http://purl.umn.edu/46390 |
| Institution/Association: | Journal of Agricultural Cooperation>Volume 8, 1993 |
| Total Pages: | 11 |
| From Page: | 28 |
| To Page: | 38 |
| Collections: | Volume 08, 1993
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| Vol 8 1993 Article 3.pdf | | 515Kb | PDF | View/Open |
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