NIFK14025U Contract and Cooperatives

Volume 2020/2021

MSc Programme in Agricultural Economics
MSc Programme in Environmental and Natural Resource Economics


Part 1 Cooperatives: 
a. What is a cooperative?
b. Economic objectives and conditions.
c. Single product payment schemes.
d. Multi product payments schemes.
Part 2 Contract Theory:
a. What is contract theory?
b. Hidden information, adverse selection
c. Hidden action, moral hazard
d. Contract design, rules of thumb
e. Examples of production contracts

Learning Outcome

The objective of this course is to learn to apply the concepts and techniques taught in the microeconomics theory course and other related courses in economic theory and econometrics, to problems faced by decision-makers in the agri-food industry and business organizations, as well as policy analysts.

After completing the course the student should be able to:

Students are expected to know the basic concepts, models and results from the theoretical and the applied literature on 
- Contract theory (in particular with applications on the agri-food industry)
- Cooperatives, pricing schemes and revenue sharing rules.

Students should be able to understand and practice 
- modern contract theory, specifically: Complete contracting, Incomplete contracting and Mechanism design.
- modern economic theory concerning cooperatives, specifically: organizationally setup and payment schemes.

Students should be able to identify and analyze current issues related to:
- Incentives, risk sharing, coordination and information in the agri-food industry
- decisions in cooperatives

Bogetoft and Olesen, Cooperatives and Payment Schemes, CBS-Press, 2007.
Bogetoft and Olesen, Design of Production Contracts, CBS-Press, 2004.
Bolton and Dewatripont, Contract Theory, MIT-Press, 2005. (chapters, 1-4). Alternatively, a similar type of text book in contract theory
Hougaard, Introduction to Allocation Rules, Springer, 2009.

Coursework coresponding to LOJA10279 Industrial Organization

Academic qualifications equivalent to a BSc degree is recommended.
Lectures, exercises, assignments, group work and group discussions.
  • Category
  • Hours
  • Lectures
  • 32
  • Preparation
  • 125
  • Theory exercises
  • 28
  • Project work
  • 20
  • Exam
  • 1
  • Total
  • 206
Continuous feedback during the course of the semester
7,5 ECTS
Type of assessment
Oral examination, 20 - 30 minutes
No time for preparation.
Exam registration requirements

A project report is a prerequisite for attending the exam and the oral exam is based on the project report and general questions in the course literature.

Without aids
Marking scale
7-point grading scale
Censorship form
No external censorship
One internal examiner

As the ordinary exam.

If the student has not handed in the project report, then it must be handed in two weeks prior to the re-exam. It must be approved before the exam.

Criteria for exam assesment

To receive 12 the student have to show complete fulfillment of the learning outcomes.