Abstract: This paper is concerned with modeling the consumer cooperative under the Cournot-Nash assumption that the consumption decision of any one consumer-member is made in the expectation that all other members' purchases remain unchanged. A similar approach has been used in the theoretical analysis of the worker-member's labor supply in the producer cooperative by Sen and a number of later writers. A Cournot-Nash analysis is perhaps even more appropriate in the case of the consumer cooperative. A utility-maximizing Cournot-Nash model of the consumer cooperative has been developed and the consumption implications of the Rochdale system of distribution of surplus (or loss) according to relative purchases were explored and contrasted with those of equal distribution to members independent of purchases. It was shown that there may be over- or under-consumption (compared with the consumption level at which marginal rates of substitution and transformation are equal) in Cournot-Nash equilibrium depending on whether average cost is rising or falling. A number of comparative statics properties of the model were explored. In particular it was shown that an increase in the membership fee would tend to raise consumption per member both in the short run and in the medium term. An optimal membership fee was derived to correct under-consumption where average costs are falling. In medium-term equilibrium with membership at the optimal level, aggregate consumption is independent of the membership fee and indeed the optimal fee is zero. Some explanation of the result that an increase in membership fee raises consumption per member is offered by the fact that income from fees is redistributed in proportion to relative purchases. Thus by increasing purchases an individual may expect to reap the benefits of other members' fee increases! An increase in fee is similar, in its effect, to a compensated reduction in fixed costs.

　　Subjects: CONSUMER cooperatives; CONSUMPTION (Economics)