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Technological Progress and Fair Compensation

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Can everyone benefit from technological progress? We study this question in a stylized model where individuals contribute inputs to produce a good and then divide the market value of the output, compensating each individual for her contribution. In this context, technological progress enables a greater output for each input combination. We show that requiring that technological progress does not harm any individual, reducing her compensation, clashes with other basic distributive goals.

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  • Szwagrzak, Karol & Moreno-Ternero, Juan D. & Østerdal, Lars Peter, 2026. "Technological Progress and Fair Compensation," Working Papers 11-2026, Copenhagen Business School, Department of Economics.
    • Handle: RePEc:hhs:cbsnow:2026_011
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    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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