3 ms·
Well, the question is how much of the output they get :-) Though actually note that the classic Mancur Olson result is "the exploitation of the strong by the w
by dash2 6y ago
Well, the question is how much of the output they get :-)
Though actually note that the classic Mancur Olson result is "the exploitation of the strong by the weak". That is, the person who has the largest share of output contributes disproportionately much to the public good.
Simple proof: write individual i's marginal benefit from the company's total effort X as
s_i f(X) - x_i
where s_i is i's share of the output f(X), and x_i is i's own effort.
Taking everyone else's effort as given, i will equate marginal benefit of own effort to marginal cost, so that total effort solves
s_i f'(X) = 1
equivalently
f'(X) = 1/s_i
Now suppose the person with the largest share satisfies the above. Then everyone with a smaller share must have
f'(X) < 1/s_i
and therefore, if they are contributing more than the minimum possible, they have an incentive to reduce their contribution. So, this extreme version has that only the largest "shareholder" does any work. (A more realistic model has a convex cost of effort, so smaller shareholders do something, but they still contribute less than their output share.)
- robocat 6y agoYour assumption is that the organisation is a cooperative - the employees get a share of the output of the organisation. Intel is not a cooperative. Fungible employees (the majority?) are paid a market clearing price (salary) for their effort. The company can derive much more value from an employee and the employee earns very little of the excess (perhaps bonuses to align working incentives).