Optimal Wage Distribution in Hierarchies

Francesc Dilmé i Soto
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Francesc Dilmé i Soto: Departamnent de Teoria Economica Universitat de Barcelona (UB), Catalonia, Spain

Cuadernos de Economía - Spanish Journal of Economics and Finance, 2007, vol. 30, issue 82, 037-074

Abstract: Most of the large firms organization schemes consist in hierarchical structures of tiers with different wage levels. Traditionally the existence of this kind of organizations has been associated to the separation of productive and managerial or supervision tasks and differences in the skills of the workers. Nevertheless, in the present there are in firms with similarly skilled workers where the hierarchical structure could be related to an incentives scheme to make the agents work. The model we present tries to inquire how the firm owner should decide the optimal wage distribution in order to maximize the profits obtained by the firm.

Keywords: Optimal wages; hierarchies; firm structure; incentives scheme; moral hazard. (search for similar items in EconPapers)
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:cud:journl:v:30:y:2007:i:83:p:037-074

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