Many students of cooperative organizations have underscored that cooperatives are plagued by substantial incentive problems, so that members do not bear the full impact of their individual choices. It is argued that incentive problems are inherent in the cooperative form. I claim that the critique needs further clarification. The idea to be advanced here is that the validity of the critique raised from agency theory and property right theory rest with their ex ante assumptions about the nature of cooperative membership. The pivotal point is whether members are essentially ascribed the properties, reasoning and strategies of a rational investor or a rational user
