Full text: Konvolut Wealth and Income Distribution 2

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The salary thus decreases geometrically as go from 
top to bottom. 
In terms of algebra: 
n: span of control 
b: managers 4 ' salary in proportion to that of his 
L: level of the hierarchy (counting the base as unity) 
N(L): number of managers at level L 
C(L): Salary at level L 
N©: number of managers at the base level 
A: Salary at the base 
The salaries under the assumptions given conform to Pereter h'otAjhZo’ S 
distribution. Simon bases his model on empirical facts (Roberts' 
regression of top manager's* on the size of firm, regression 
coefficient 0, 3^, which would correspond to the value of 
and Davis' Pareto distribution of managers' salaries in General 
Motors, Pareto coefficient 3). 
The above demonstration is ourelv deterministic, but if jwe" 
we regard the span of control as the reciprocal of a probabi^ \

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