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Rational Sabotage in Cooperative Production with Heterogeneous Agents

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  • Beviá, Carmen
  • Corchón, Luis C.

Abstract

We present a model of cooperative production in which rational agents might carry out sabotage activities that decrease output. We provide necessary and sufficient conditions for the existence of a Nash equilibrium without sabotage. It is shown that the absence of sabotage in equilibrium depends on the interplay between technology, relative productivity of agents and the degree of meritocracy. In particular we show that, ceteris paribus, meritocratic systems give more incentives to sabotage than egalitarian systems.

Suggested Citation

  • Beviá, Carmen & Corchón, Luis C., 2006. "Rational Sabotage in Cooperative Production with Heterogeneous Agents," UC3M Working papers. Economics we20090204, Universidad Carlos III de Madrid. Departamento de Economía.
    • Handle: RePEc:cte:werepe:we20090204
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    Cited by:

    1. Subhasish Chowdhury & Oliver Gürtler, 2015. "Sabotage in contests: a survey," Public Choice, Springer, vol. 164(1), pages 135-155, July.
    2. Nana Adrian & Marc M ller, 2019. "Partnerships with Asymmetric Information: The Benefit of Sharing Equally amongst Unequals," Diskussionsschriften dp1904, Universitaet Bern, Departement Volkswirtschaft.
    3. Arup Bose & Debashis Pal & David E. M. Sappington, 2010. "Equal Pay for Unequal Work: Limiting Sabotage in Teams," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(1), pages 25-53, March.
    4. repec:bla:annpce:v:89:y:2018:i:1:p:87-107 is not listed on IDEAS
    5. Chung, A., 2024. "Target Setting in Contests with Sabotage," Cambridge Working Papers in Economics 2409, Faculty of Economics, University of Cambridge.
    6. Jörg Franke, 2014. "Equal, proportional, and mixed sharing of cooperative production under the threat of sabotage," Journal of Economics, Springer, vol. 113(3), pages 253-273, November.

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    More about this item

    Keywords

    Cooperative production;

    JEL classification:

    • D20 - Microeconomics - - Production and Organizations - - - General
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • J54 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Producer Cooperatives; Labor Managed Firms

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