We extend the results of Feng and Hendrikse (2012) by investigating the relationship between cognition and incentives in cooperatives versus investor-owned firms (IOFs) in a multi-tasking principal-agent model. The principal chooses the incentive intensity as well as the precision of monitoring, while the agent chooses the activities. We establish that a cooperative is uniquely efficient when either the synergy between the upstream and downstream activities or the knowledgeability of the members regarding the cooperative enterprise is sufficiently high.

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hdl.handle.net/1765/137124
ERIM Report Series Research in Management
ERIM report series research in management Erasmus Research Institute of Management
Erasmus Research Institute of Management

Wei, A., & Hendrikse, G. (2022). Cognition and Incentives in Cooperatives (No. ERS-2022-007-ORG). ERIM report series research in management Erasmus Research Institute of Management. Retrieved from http://hdl.handle.net/1765/137124