Publication Date



Technical Report: UTEP-CS-19-55

Published in Applied Mathematical Sciences


At first glance, it seems that people should be paid in proportion to their contribution, so if one person produces a little more than the other one, he/she should be paid a little more. In reality, however, top performers are paid dis-proportionally more than those whose performance is slightly worse. How can we explain this from an economic viewpoint? We show that actually there is no paradox here: a simple economic analysis shows that in many area, it makes perfect economic sense to pay much more to top performers.