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Socioemotional Wealth and Product Differentiation in the Informal Economy: A Simple Theroetical Model

Author

Listed:
  • Augendra Bhukuth

    (Ieseg Management School, France)

  • Damien Bazin

    (Université Côte d'Azur
    GREDEG CNRS)

  • Abir Khribich

    (Université Côte d'Azur, CNRS, GREDEG, France
    Faculty of Economic Sciences and Management of Nabeul, University of Carthage, Tunisia
    LEGI, Tunisia Polytechnic School)

Abstract

In this article we develop a simple product differential model in which the input, socioemotional wealth, takes the form of knowledge sharing between employees. Competition in the informal economay depends on product differentiation, and our model shows that when micro family enterprises in the informal economy rely on family workers to differentiate their products from those of their competitors, they increase their productivity, remain competitive, and sustain their activities in a highly competitive market. Micro family enterprises reward the loyalty of family workers by providing them with social benefits, whereas the wage depends on the knowledge shared between workers.

Suggested Citation

  • Augendra Bhukuth & Damien Bazin & Abir Khribich, 2022. "Socioemotional Wealth and Product Differentiation in the Informal Economy: A Simple Theroetical Model," GREDEG Working Papers 2022-09, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    • Handle: RePEc:gre:wpaper:2022-09
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    References listed on IDEAS

    as
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    3. Abraham Katharine G. & Amaya Ashley, 2019. "Probing for Informal Work Activity," Journal of Official Statistics, Sciendo, vol. 35(3), pages 487-508, September.
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    Keywords

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    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D29 - Microeconomics - - Production and Organizations - - - Other
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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