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Strategic Work Interactions and the Kibbutz-Kolkhoz Paradox

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  • Guttman, Joel M
  • Schnytzer, Adi

Abstract

The authors develop a model of strategic work interactions in collective enterprises explaining the following observation: the Israeli kibbutz, in which net collective output is distributed equally, has been an economic success, while the Soviet kolkhoz, in which net output traditionally was divided according to relative work input, has been a failure. In contrast, the conventional Cournot-Nash theory of collective enterprises predicts superoptimal output in the kolkhoz, while in the kibbutz, the free-fider problem is predicted to lead to suboptimal effort. Their theory predicts Pareto optimal work effort in the kibbutz and suboptimal effort in the kolkhoz. Copyright 1989 by Royal Economic Society.

Suggested Citation

  • Guttman, Joel M & Schnytzer, Adi, 1989. "Strategic Work Interactions and the Kibbutz-Kolkhoz Paradox," Economic Journal, Royal Economic Society, vol. 99(397), pages 686-699, September.
    • Handle: RePEc:ecj:econjl:v:99:y:1989:i:397:p:686-99
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    Cited by:

    1. Raul V. Fabella, 2013. "Moral Hazard and Cooperation in Competing Teams," UP School of Economics Discussion Papers 201308, University of the Philippines School of Economics.
    2. Depken II, Craig A. & Redmount, Esther & Snow, Arthur, 2001. "Shirking and the choice of technology: a theory of production inefficiency with an empirical application," Journal of Economic Behavior & Organization, Elsevier, vol. 44(4), pages 383-402, April.
    3. Raul Fabella, 2000. "A Contractarian Approach to Pareto Efficiency in Teams: A Note," Theory and Decision, Springer, vol. 48(2), pages 139-149, March.
    4. Shilony, Yuval, 2000. "Diversity and ingenuity in voluntary collective action," European Journal of Political Economy, Elsevier, vol. 16(3), pages 429-443, September.
    5. Raul V. Fabella, 2014. "Comprehensive Agrarian Reform Program (CARP): Time to let go," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 51(1), pages 1-18, June.
    6. Raul V. Fabella, 2013. "Salience and Cooperation Among Rational Egoists," UP School of Economics Discussion Papers 201309, University of the Philippines School of Economics.
    7. Willner, Johan, 2001. "Ownership, efficiency, and political interference," European Journal of Political Economy, Elsevier, vol. 17(4), pages 723-748, November.

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