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Rational Sabotage in Cooperative Production

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  • Corchón, Luis C.
  • Beviá, Carmen

Abstract

In this paper we consider a model of cooperative production in which rational agents have the possibility to engage in sabotage activities that decrease output. It is shown that sabotage depends on the interplay between the degree of congestion, the technology of sabotage, the number of agents the degree of meritocracy and the form of the sharing rule. In particular it is shown that, ceteries paribus, meritorcratic systems give more incentives to sabotage than egalitarian systems. We address two questions: The degree of meritocracy that is compatible with absence of sabotage and the existence of a Nash equilibrium with and without sabotage.

Suggested Citation

  • Corchón, Luis C. & Beviá, Carmen, 2002. "Rational Sabotage in Cooperative Production," UC3M Working papers. Economics we20021001, Universidad Carlos III de Madrid. Departamento de Economía.
  • Handle: RePEc:cte:werepe:we20021001
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    1. James W. Friedman, 1971. "A Non-cooperative Equilibrium for Supergames," Review of Economic Studies, Oxford University Press, vol. 38(1), pages 1-12.
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    5. Konrad, Kai A, 2000. "Sabotage in Rent-Seeking Contests," Journal of Law, Economics, and Organization, Oxford University Press, vol. 16(1), pages 155-165, April.
    6. Fabella, Raul V., 1988. "Natural team sharing and team productivity," Economics Letters, Elsevier, vol. 27(2), pages 105-110.
    7. Robert Gibbons, 1998. "Incentives in Organizations," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 115-132, Fall.
    8. Lazear, Edward P, 1989. "Pay Equality and Industrial Politics," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 561-580, June.
    9. Pfingsten, Andreas, 1991. "Surplus-sharing methods," Mathematical Social Sciences, Elsevier, vol. 21(3), pages 287-301, June.
    10. Martin J. Osborne & Ariel Rubinstein, 1994. "A Course in Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650401, January.
    11. Roemer John E. & Silvestre Joaquim, 1993. "The Proportional Solution for Economies with Both Private and Public Ownership," Journal of Economic Theory, Elsevier, vol. 59(2), pages 426-444, April.
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