Inequality and a Repeated Joint Project

Olivier Dagnelie ()

UFAE and IAE Working Papers from Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC)

Abstract: Agents voluntarily contribute to an infinitely repeated joint project. We investigate the conditions for cooperation to be a renegotiation-proof and coalition-proof equilibrium before examining the influence of output share inequality on the sustainability of cooperation. When shares are not equally distributed, cooperation requires agents to be more patient than under perfect equality. Beyond a certain degree of share inequality, full efficiency cannot be reached without redistribution. This model also explains the coexistence of one cooperating and one free-riding coalition. In this case, increasing inequality can have a positive or negative impact on the aggregate level of effort.

Pages: 28
Date: 2008-05-10
New Economics Papers: this item is included in nep-bec and nep-ppm
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Inequality and a Repeated Joint Project (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:aub:autbar:740.08

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