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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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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. Subhasish Chowdhury & Oliver Gürtler, 2015. "Sabotage in contests: a survey," Public Choice, Springer, vol. 164(1), pages 135-155, July.

    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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