Abstract: The article focuses on membership and employment in egalitarian cooperative associations. A producer cooperative is considered to be a group of members that takes financial responsibility for a fixed debt obligation in return for the use of a short-run production technology. When the group is formed, the market price of the single-output good produced by this technology is assumed to be unknown. Cooperative members are thus claimants to uncertain net income, that is, revenues minus the fixed debt obligation. However, once membership is finalized, it is assumed that the output price becomes known. In this temporal sequence of events, the members then determine employment in the cooperative, taking into consideration any available alternative sources of income. Although the membership decision occurs before the employment one in a chronological sense, the need for potential members to evaluate expected income before applying for membership necessitates the determination of an employment policy for the cooperative before optimal membership can be considered.

　　Subjects: COOPERATIVE societies; ASSOCIATIONS, institutions, etc. -- Membership; EMPLOYMENT (Economic theory); DEBT; PRODUCER cooperatives; CORPORATIONS -- Finance; Consumer Lending