Wealth Dynamics and the Endogenous Design of Firm Organization

Hiroshi Osano

The Japanese Economic Review, 2003, vol. 54, issue 3, 300-323

Abstract: The purpose of this paper is to explore a dynamic interaction between wealth distribution and firm organization design using a model of growth in altruism in which a consideration of moral hazard on the part of agents with risk‐averse preferences prevents complete insurance and generates inequality. I show (i) that there exists an ergodic invariant distribution of wealth to which the stochastic process of lineage wealth converges globally, and (ii) that the firm form with direct evaluation of the agent's effort is more likely to be chosen as wealth is distributed more equally.

Date: 2003
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Persistent link: https://EconPapers.repec.org/RePEc:bla:jecrev:v:54:y:2003:i:3:p:300-323

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