Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/247778 
Authors: 
Year of Publication: 
2021
Citation: 
[Journal:] Real-World Economics Review [ISSN:] 1755-9472 [Issue:] 98 [Publisher:] World Economics Association [Place:] Bristol [Year:] 2021 [Pages:] 58-86
Publisher: 
World Economics Association, Bristol
Abstract: 
Although the determinants of income are complex, the results are surprisingly uniform. To a first approximation, top incomes follow a power-law distribution, and the redistribution of income corresponds to a change in the power-law exponent. Given the messiness of the struggle for resources, why is the outcome so simple? This paper explores the idea that the (re)distribution of top incomes is uniform because it is shaped by a ubiquitous feature of social life, namely hierarchy. Using a model first developed by Herbert Simon and Harold Lydall, I show that hierarchy can explain the power-law distribution of top incomes, including how income gets redistributed as the rich get richer.
Subjects: 
corporation
despotism
government
hierarchy
income distribution
inequality
power
JEL: 
P16
G3
L1
L2
D3
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article
Document Version: 
Published Version

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