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Rational Sabotage in Cooperative Production

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  • Corchón, Luis C.
  • Beviá, Carmen

Abstract

In this paper we consider a model of cooperative production in which rational agents have the possibility to engage in sabotage activities that decrease output. It is shown that sabotage depends on the interplay between the degree of congestion, the technology of sabotage, the number of agents the degree of meritocracy and the form of the sharing rule. In particular it is shown that, ceteries paribus, meritorcratic systems give more incentives to sabotage than egalitarian systems. We address two questions: The degree of meritocracy that is compatible with absence of sabotage and the existence of a Nash equilibrium with and without sabotage.

Suggested Citation

  • Corchón, Luis C. & Beviá, Carmen, 2002. "Rational Sabotage in Cooperative Production," UC3M Working papers. Economics we20021001, Universidad Carlos III de Madrid. Departamento de Economía.
    • Handle: RePEc:cte:werepe:we20021001
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