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Hierarchical Organization and Performance Inequality: Evidence from Professional Cycling

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Author Info

  • Bertrand Candelon

    (Department of economics, Maastricht University)

  • Arnaud Dupuy

    (Corresponding address: ROA and department of economics, Maastricht University PO Box 616, NL-6200 MD, The Netherlands. Email: a.dupuy@roa.unimaas.nl)

Abstract

This paper proposes an equilibrium theory of the organization of work in an economy with an implicit market for productive time. In this market, agents buy or sell productive time. This implicit mar- ket gives rise to the formation of teams, organized in hierarchies with one leader (buyer) at the top and helpers (sellers) below. Relative to autarky, hierarchical organization leads to higher within and between team payo¤s/productivity inequality. This prediction is tested empir- ically in the context of professional road cycling. We show that the observed rise in performance inequality in the peloton since the 1970s is merely due to a rise in help intensity within team and consistent with a change in the hierarchical organization of teams.

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File URL: http://web2.msm.nl/RePEc/msm/wpaper/MSM-WP2012-12.pdf
File Function: First version, 2012
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Bibliographic Info

Paper provided by Maastricht School of Management in its series Working Papers with number 2012/12.

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Length: 77 pages
Date of creation: Apr 2012
Date of revision:
Handle: RePEc:msm:wpaper:2012/12

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Related research

Keywords: Hierarchical organization; productive time; helping time; inequality; professional cycling;

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  1. Marko Tervio, 2008. "The Difference That CEOs Make: An Assignment Model Approach," American Economic Review, American Economic Association, vol. 98(3), pages 642-68, June.
  2. Alex Edmans & Xavier Gabaix & Augustin Landier, 2009. "A Multiplicative Model of Optimal CEO Incentives in Market Equilibrium," Review of Financial Studies, Society for Financial Studies, vol. 22(12), pages 4881-4917, December.
  3. Xavier Gabaix & Augustin Landier, 2008. "Why Has CEO Pay Increased So Much?," The Quarterly Journal of Economics, MIT Press, vol. 123(1), pages 49-100, 02.
  4. Sattinger, Michael, 1993. "Assignment Models of the Distribution of Earnings," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 831-80, June.
  5. Becker, Gary S, 1973. "A Theory of Marriage: Part I," Journal of Political Economy, University of Chicago Press, vol. 81(4), pages 813-46, July-Aug..
  6. Godfrey, Leslie G, 1978. "Testing for Higher Order Serial Correlation in Regression Equations When the Regressors Include Lagged Dependent Variables," Econometrica, Econometric Society, vol. 46(6), pages 1303-10, November.
  7. Robert E. Lucas Jr., 1978. "On the Size Distribution of Business Firms," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 508-523, Autumn.
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Cited by:
  1. Dupuy, Arnaud, 2013. "The Assignment of Workers to Tasks with Endogenous Supply of Skills," IZA Discussion Papers 7303, Institute for the Study of Labor (IZA).

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