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WIDER Discussion Papers, United Nations University (UNU) >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/10419/53021
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Full metadata record
| DC Field | | Value | | Language |
| dc.contributor.author | | Joshi, Sumit | | en_US |
| dc.contributor.author | | Smith, Stephen C. | | en_US |
| dc.date.accessioned | | 2011-12-14T09:46:10Z | | - |
| dc.date.available | | 2011-12-14T09:46:10Z | | - |
| dc.date.issued | | 2002 | | en_US |
| dc.identifier.isbn | | 9291902993 | | en_US |
| dc.identifier.uri | | http://hdl.handle.net/10419/53021 | | - |
| dc.description.abstract | | This paper develops a theory of endogenous league formation and considers its implications for policy in developing countries. We generalize from features of the two most prominent European co-op leagues, Mondragón and La Lega, to develop the first formal model of the endogenous formation of co-operative networks and their constituent member coops. We show that if co-op leagues are formed through an open membership game, there can be two Nash equilibria, one with and one without a co-op league; and in this case, the equilibrium with a co-op league Pareto dominates the latter. In examining the formation of constituent co-operative firms, we show that, when payoffs to joining a co-op for potential worker members are initially increasing in membership and then decreasing, the outcome of the game depends on the rules of co-op formation. If payoffs are equal to the alternative wage at a single, unique membership size, then open membership and exclusive membership rules of the game yield the same outcome that either no co-op will be formed, or all co-ops formed will have the same number of members; but the coalition unanimity game has a unique outcome with co-op formation. If worker member payoffs exceed the alternative wage, our three alternative rules of co-op formation yield different outcomes. In the open membership game where some workers work for conventional firms, coops will be formed at the largest size for which co-op payoffs are equal to the alternative wage. However, if co-op payoffs exceed the conventional wage only when all workers join coops, then equilibrium co-op sizes can potentially include a wide range of membership sizes. In the exclusive membership game, all co-op sizes in the interval for which co-op payoffs are at least as large as conventional wages are equilibria. Finally, in the coalition unanimity game, only co-op sizes at which the highest income per member is achieved are equilibria. Only the latter result corresponds to the traditional neoclassical Ward-Vanek labour managed firm literature (though not necessarily with its comparative statics implications). A series of modelling extensions are discussed. Implications for existing and potential co-op leagues in developing countries are appraised, and implications for policy examined. | | en_US |
| dc.language.iso | | eng | | en_US |
| dc.publisher | | UNU-WIDER Helsinki | | en_US |
| dc.relation.ispartofseries | | WIDER Discussion Papers // World Institute for Development Economics (UNU-WIDER) 2002/87 | | en_US |
| dc.subject.jel | | C72 | | en_US |
| dc.subject.jel | | O12 | | en_US |
| dc.subject.jel | | P13 | | en_US |
| dc.subject.ddc | | 330 | | en_US |
| dc.subject.keyword | | co-operatives | | en_US |
| dc.subject.keyword | | networks | | en_US |
| dc.subject.keyword | | game theory | | en_US |
| dc.subject.keyword | | Mondragón | | en_US |
| dc.subject.keyword | | La Lega | | en_US |
| dc.subject.keyword | | Legacoop | | en_US |
| dc.subject.keyword | | labour managed firm | | en_US |
| dc.subject.stw | | Interessengruppentheorie | | en_US |
| dc.subject.stw | | Spieltheorie | | en_US |
| dc.subject.stw | | Arbeiterselbstverwaltung | | en_US |
| dc.subject.stw | | Mondragón | | en_US |
| dc.subject.stw | | Italien (Nord) | | en_US |
| dc.title | | An endogenous group formation theory of co-operative networks: The economics of La Lega and Mondragón | | en_US |
| dc.type | | Working Paper | | en_US |
| dc.identifier.ppn | | 355588005 | | en_US |
| dc.rights | | http://www.econstor.eu/dspace/Nutzungsbedingungen | | en_US |
| Appears in Collections: | | WIDER Discussion Papers, United Nations University (UNU)
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