Wealth effects, distribution, and the theory of organization | Patrick Legros
plegros.net
How wealth distribution shapes the very structure of organizations is an underexplored frontier — and this work reveals why who owns what determines how firms are built from the ground up.
Theory of the FirmWealth EffectsIncomplete Contracts TheoryPrincipal-Agent Problem
Theory Briefing
- Legros's research links wealth inequality directly to how organizations form, challenging the idea that firm structure is purely efficiency-driven.
- Wealth effects mean that capital-constrained agents accept worse contracts, skewing organizational design toward those who already hold assets.
- Distribution of resources across individuals shapes incentive structures inside firms, connecting macro inequality to micro organizational theory.