On the theory of equalizing differences; Increasing abundances of types of workers may increase their earningsEdward John Cartwright () and Myrna Wooders () Economics Bulletin, 2001, vol. 4, pages 1-10 Abstract: The theory of equalising differences recognises that wage differentials may be required to equalise the attractiveness of alternative occupations. We examine this theory using the Conley/Wooders 'crowding types' model. The crowding types model distinguishes between the tastes of a player and his crowding type, those attributes of the player that directly effect the well-being of other players in the same club - a player's skill, productivity or personality are examples. A club can be interpreted as firm in which the job attributes are the club goods; thus, the crowding types model, with its distinction between tastes and crowding types, provides a natural environment in which to study equalising differences. In contrast to results for earlier models, we demonstrate that even when small groups of players are strictly effective in a strong sense, an increase in the abundance of players of one crowding type can increase the core payoffs to players of that crowding type. Keywords: clubs; comparative statics; cooperative game theory; core; crowding types; equalizing differences; local public goods; monotonicity; small group effectiveness; wage differentials (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: http://EconPapers.repec.org/RePEc:ebl:ecbull:eb-01d40001 Access Statistics for this article More articles in Economics Bulletin from Economics Bulletin |
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