Analysis of Economic Models of Cooperation


Despite the existence of vigorous theoretical basis lor cooperatives little
attention has been paid to it in Iran. At the same time, little use has been
made of the quantitative models for analyzing the efIects and impacts of
cooprative activities in economic literature. In this study, followed by a
review of literature on cooperaion theory, a simple quantitative model was examined. This model considers various behavior and equilibrium
conditions for cooperatives. The model was simulated using the data and
information ofIranian dairy industry. Results ofthis study showed that
under cooperative activities the price offinal product could be reduced,
while the price of raw product, (i.e. inputs) could be raised. Therefore, the welfare of raw product producers and total payments to them were
increased. The volume ofproduction offinal product and purchases of
. raw product were also increased as a result of cooperation. These results indicate that cooperatives can playa very significant and effective role in promoting the welfare and income ofproducers of raw products and consumers offinal products.