THE EFFECT OF MARKETING COOPERATIVES ON COST-REDUCING PROCESS INNOVATION ACTIVITY



Table 4. Subgame Perfect Equilibrium in the Mixed Oligopsony when the Co-op is a Monopsonist in
Stage 3

Pre-innovation Stage
(Stage 1)

wC(1)

wI(1)

8tψpC+ pI- 3t

8tψ +1
4tψpC+(4tψ+1) pI-2t(2tψ+1)

8tψ +1

2ψ(3t + Pc - Pi )

xC(1)

8 tψ +1

2ψ + 1 + 2ψ(Pi -Pc)

xI(1)

8 tψ +1

Innovation Stage

r

2(3t + Pc - Pi )

(Stage 2)

C

8 tψ +1

rI

0

r

2(3t + Pc - Pi )

rT

8 tψ +1

Post-innovation Stage

wC(3)

6t+(8tψ+3)Pc-2Pi

(Stage 3)

C(3)

8 tψ +1

wI(3)

_

xC(3)

1

xI(3)

0



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