Most agricultural marketing cooperatives distribute members' net revenues on a pool basis. The present paper outlines various pool options and provides a framework for identifying privately and collectively optimal pooling rules. Individual members' pool choices are found to vary according to farm enterprise and risk aversion level. A collectively optimal rule depends generally on risk aversion and on the method used to aggregate individuals' expressed preferences. In the instance examined here, however, the collective optimum is somewhat insensitive to assumed risk aversion. Key words: collective choice, cooperative marketing, market pools, pooling, stochastic dominance.

Source: American Journal of Agricultural Economics, Vol. 67, No. 1 (Feb., 1985), pp. 70-80
Published by: Blackwell Publishing on behalf of the Agricultural & Applied Economics Association