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HIERARCHICAL ORGANIZATION AND PERFORMANCE INEQUALITY: EVIDENCE FROM PROFESSIONAL CYCLING
Author(s) -
Candelon Bertrand,
Dupuy Arnaud
Publication year - 2015
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/iere.12135
Subject(s) - autarky , hierarchical organization , context (archaeology) , inequality , productivity , cycling , microeconomics , economics , work (physics) , market economy , mathematics , macroeconomics , management , mathematical analysis , archaeology , mechanical engineering , history , paleontology , welfare , engineering , biology
This article proposes an equilibrium theory of the organization of work in an economy with an implicit market for productive time. In this market, agents buy or sell productive time. This implicit market gives rise to the formation of teams, organized in hierarchies with one leader (buyer) at the top and helpers (sellers) below. Relative to autarky, hierarchical organization leads to higher within and between team payoffs/productivity inequality. This prediction is tested empirically in the context of professional road cycling. We show that 46% of performance inequality in the Tour de France is due to hierarchical organization within team whereas team composition only accounts for 6%.