On the Evolution of Product Portfolio of Cooperatives versus IOFs: An Agent-Based Analysis of the Single Origin Constraint

17 Pages Posted: 1 Jun 2022

See all articles by Wendong Deng

Wendong Deng

Schattdecor AG

George W.J. Hendrikse

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM); Erasmus Research Institute of Management (ERIM)

Date Written: May 30, 2022

Abstract

An agent-based model is developed to address the relationship between the ownership structure of an enterprise and the evolution of its product portfolio. The coherence and evolution of a product portfolio is operationalized by transition rules regarding the Moore environment. The distinguishing feature of a cooperative is the single origin constraint according to Cook (1997), which is modelled as a cooperative assigning an infinite lifetime to the first product in its product portfolio, while all other products have finite lifetime. All product of an investor-owned firm (IOF) are assumed to have finite lifetime. Our simulation results show that the single origin constraint pulls the activities of the cooperative in one cluster centered around the first activity, while the IOF’s product portfolio develops in a centrifugal way. The cooperative and the IOF are more diversified in a mixed duopoly.

Keywords: diversification, agent-based model, coherence, single origin constraint, cooperatives

Suggested Citation

Deng, Wendong and Hendrikse, George W.J., On the Evolution of Product Portfolio of Cooperatives versus IOFs: An Agent-Based Analysis of the Single Origin Constraint (May 30, 2022). ERIM Report Series Reference Forthcoming, Available at SSRN: https://ssrn.com/abstract=4122989 or http://dx.doi.org/10.2139/ssrn.4122989

Wendong Deng

Schattdecor AG ( email )

George W.J. Hendrikse (Contact Author)

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands

Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

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