HarvestTech agriculture cooperatives: Beneficiaries and compensations

TL;DR

This paper introduces a novel game-theoretic framework for agricultural cooperatives, modeling inter-firm cooperation to ensure fair profit sharing and cost reduction, validated through a case study.

Contribution

It develops a new class of totally balanced games for modeling cooperative interactions in agriculture, providing a stable and fair compensation method.

Findings

Cooperative strategies improve agricultural process efficiency.

A new class of balanced games models firm interactions effectively.

Stable profit allocation procedures are feasible and effective.

Abstract

Agricultural industries face increasing pressure to optimize efficiency and reduce costs in a competitive and resource-constrained global market. As firms seek innovative ways to enhance productivity, cooperative strategies have emerged as a promising solution to address these challenges. In this context, game theory provides a powerful framework for analyzing and structuring such cooperative efforts, ensuring that each firm's contribution is fairly rewarded. This paper presents an innovative approach to address challenges in agricultural crop processing through inter-firm cooperation. A new class of totally balanced games is introduced, which models the strategic interactions among companies processing agricultural products. The objective is to identify profit allocations that fairly compensate firms contributing to cost reduction and surplus processing for others. To achieve this, the allocations resulting from each type of compensation will be thoroughly examined, and a coalitionally stable compensation procedure will be established. The study demonstrates the feasibility and effectiveness of cooperative strategies for optimizing agricultural processes. Lastly, the findings will be applied to a case study.