A New Institutional Economics Approach to Contracts and Cooperatives

Posted: 24 Jan 2002

See all articles by Michael E. Sykuta

Michael E. Sykuta

University of Missouri at Columbia - Division of Applied Social Sciences

Michael L. Cook

University of Missouri at Columbia - Agricultural and Applied Economics

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Abstract

Our purpose in this paper is to highlight the role of organizational structure and incentives in the design of contracts between buyers and sellers of agricultural products. In particular, we consider how differences between investor-owned (IOF) and producer-oriented (POF) firms, and differences between alternate types of POFs, may affect the types of contract terms those respective organizations are likely to prefer in their contracts with agricultural producers. New institutional economics theories of contracting, agency and property rights allocation suggest that cooperative contractors may be able to design contracts that enhance economic efficiency that IOFs cannot easily replicate.

Keywords: Contracting, cooperatives, organizational structure

JEL Classification: L14, L21, Q13

Suggested Citation

Sykuta, Michael E. and Cook, Michael L., A New Institutional Economics Approach to Contracts and Cooperatives. Available at SSRN: https://ssrn.com/abstract=291408

Michael E. Sykuta (Contact Author)

University of Missouri at Columbia - Division of Applied Social Sciences ( email )

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Columbia, MO 65211
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HOME PAGE: http://michaelsykuta.com

Michael L. Cook

University of Missouri at Columbia - Agricultural and Applied Economics ( email )

Columbia, MO 65211
United States

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