Experimentation and Optimal Output Decisions: The Cooperative Versus the Entrepreneurial Firm

This paper studies and contrasts the experimental inclinations of entrepreneurial and cooperative firms supplying a perishable good under uncertain demand, when larger stocks might yield additional information about the demand-generating process. While these firms might react differently, and in the case of the cooperative not unambiguously, to environmental change, neither variant will find the higher output—possibly more informative—option especially attractive.