Product Quality in the Agri-Food Chain: Do Cooperatives Offer High Quality Wine?

Christoph Weiss, Dieter Pennerstorfer

Publication: Scientific journalJournal articlepeer-review


We investigate the impact of decentralised decision-making on product quality. Comparing a cooperative and an investor-owned firm suggests that members of the cooperative have an incentive to produce too much and to free-ride on quality. Whether or not cooperatives deliver higher quality products depends on the way in which the quality of the final product is determined from the quality levels of the inputs delivered (quality aggregation) as well as the number of members of the cooperative. Empirical evidence on the Austrian wine market suggests that wines produced by cooperatives tend to be of significantly lower quality, ceteris paribus.
Original languageEnglish
Pages (from-to)143 - 162
JournalEuropean Review of Agricultural Economics
Issue number1
Publication statusPublished - 2013

Austrian Classification of Fields of Science and Technology (ÖFOS)

  • 405002 Agricultural economics

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