<p>My understanding is that standard models in economics assume the firm is a capitalistic firm, in the sense that it pay workers a wage but no profits. (is that right?) </p>

<p>I am interested in modeling cooperatives, where workers own profits and distribute them. But profits seem hard to model explicitly. Any idea how to model this? Perhaps a reference to the literature?</p>

CC BY-SA 3.0
2016-08-31T08:27:51.740Z
The general assumption is that the firm is profit maximizing. In general equilibrium theory it is frequently assumed that ownership is independent of working for the firm. That is employees may or may not own the firm.
Giskard
CC BY-SA 3.0
2016-08-31T11:33:17.683Z
In many GE models, the profits return to the worker in the form of dividends so they do own the firm. But yes, I've seen Robinson Crusoe extensions (one from a Berkeley problem set I believe) where the worker basically has a union that overrides the firm's decisionmaking on profit distribution, and the firm will behave as normal conditional on the union's first order condition.
VCG
<reference-request><firm>
How to model cooperatives
luchonacho
# How to model cooperatives

(Asked by: username_0 on 2016-08-31)

My understanding is that standard models in economics assume the firm is a capitalistic firm, in the sense that it pay workers a wage but no profits. (is that right?)

I am interested in modeling cooperatives, where workers own profits and distribute them. But profits seem hard to model explicitly. Any idea how to model this? Perhaps a reference to the literature?

**Tags:** reference-request, firm
> **Comments:**
> **username_1**: The general assumption is that the firm is profit maximizing. In general equilibrium theory it is frequently assumed that ownership is independent of working for the firm. That is employees may or may not own the firm.  
> **username_2**: In many GE models, the profits return to the worker in the form of dividends so they do own the firm. But yes, I've seen Robinson Crusoe extensions (one from a Berkeley problem set I believe) where the worker basically has a union that overrides the firm's decisionmaking on profit distribution, and the firm will behave as normal conditional on the union's first order condition.  

---

## 0 answers

