A BEJTE Topics article.

Abstract

We present a model of cooperative production in which rational agents might carry out sabotage activities that decrease output. We provide necessary and sufficient conditions for the existence of a Nash equilibrium without sabotage. It is shown that the absence of sabotage in equilibrium depends on the interplay between technology, relative productivity of agents and the degree of meritocracy. In particular we show that, ceteris paribus, meritocratic systems give more incentives to sabotage than egalitarian systems.

Submitted: June 24, 2005 · Accepted: July 13, 2006 · Published: November 10, 2006

Originally published in Topics in Theoretical Economics.

Recommended Citation

Bevia, Carmen and Corchón, Luis C. (2006) "Rational Sabotage in Cooperative Production with Heterogeneous Agents," Topics in Theoretical Economics: Vol. 6 : Iss. 1, Article 16.
Available at: http://www.bepress.com/bejte/topics/vol6/iss1/art16