Marketing Cooperatives in the U.S.: Membership Policies, Market Power, and Antitrust Policy

Abstract

This paper explores some of these issues and briefly considers their implications for antitrust policy toward cooperatives. Two central questions are: What is the extent of restricted as opposed to open membership cooperation in the United States? If an observable pattern in membership policies exists among cooperatives, what might explain it? These questions require observation and analysis of numerous market factors, an important one being the extent to which marketing cooperatives have gained market power in their final product markets. The full significance of the empirical findings and their policy implications requires an understanding of certain basic theoretical considerations. Theoretical Considerations Recent advances in theory of cooperation make considerable use of an average revenue product (ARP) function which shows for alternative levels of an input the maximum price which a firm can pay for that input, given that all other costs have been met.1 The corresponding marginal revenue product (MRP) function shows the rate of change in total revenue product associated with various levels of input. That part of the MRP