Hierarchy and the Power-Law Income Distribution Tail

Artikel

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Journal of Computational Social Science ; ISSN: 2432-2725 ; Year: 2018 ; Issue: OnlineFirst, July 2018 ; Pages: 1-21 ; Singapore: Springer

Classification and Topics

• Classification: Wirtschaft
• Subject: power law ; income distribution ; firm hierarchy ; economic modeling

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Fix, Blair
• Event: Veröffentlichung
• (who): Springer ; ZBW – Leibniz Information Centre for Economics
• (where): Singapore
• (when): 2018

Further information

• DOI: doi:10.1007/s42001-018-0019-8
• Handle: http://hdl.handle.net/10419/180820
• Last update: 10.03.2025, 11:43 AM CET