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Fix, Blair
Year of Publication: 
[Journal:] Journal of Computational Social Science [ISSN:] 2432-2725 [Issue:] OnlineFirst, July 2018 [Pages:] 1-21
What explains the power-law distribution of top incomes? This paper tests the hypothesis that it is firm hierarchy that creates the power-law income distribution tail. Using the available case-study evidence on firm hierarchy, I create the first large-scale simulation of the hierarchical structure of the US private sector. Although not tuned to do so, this model reproduces the power-law scaling of top US incomes. I show that this is purely an effect of firm hierarchy. This raises the possibility that the ubiquity of power-law income distribution tails is due to the ubiquity of hierarchical organization in human societies.
power law
income distribution
firm hierarchy
economic modeling
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Manuscript Version (Preprint)
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Document Version: 
Manuscript Version (Preprint)

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