Consumer cooperatives represent a highly successful example of democratic form of enterprises operating in developed countries. They are usually medium to large- scale companies competing with the proﬁt-maximizing ﬁrms in the retail sector. This paper describes this situation as a mixed oligopoly in which consumer cooperatives maximize the utility of consumer-members and, in return, refund them with a share of the proﬁts corresponding to the ratio of their individual spending to the cooperative’s total sales. We show that when consumers possess quasi-linear preferences over a bundle of symmetrically diﬀer- entiated goods, and companies operate using a linear technology, the presence of consumer cooperatives positively aﬀects total industry output, as well as welfare. The eﬀect of cooperatives on welfare proves to be even more signiﬁcant when goods are either complements or highly diﬀerentiated, and when competition is à la Cournot rather than à la Bertrand.
- consumer Co-operatives,
- Mixed Oligopoly,
- Profit-maximizing Firms
Available at: http://works.bepress.com/marco_marini/1/