Interdependent Preferences and the Competitive Wage Structure
AbstractThis article shows by example that when workers care about relative income and are free to choose their coworkers, the equilibrium distribution of wages within firms must be less dispersed than the corresponding distribution of marginal products. An implicit market for within-firm status is shown to produce welfare gains by sorting workers among firms in accordance with how much they are willing to pay for high rank. The resulting equilibrium Pareto dominates allocations in which each worker is paid his marginal product.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by The RAND Corporation in its journal RAND Journal of Economics.
Volume (Year): 15 (1984)
Issue (Month): 4 (Winter)
Contact details of provider:
Web page: http://www.rje.org
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- John Komlos & Peter Salamon, 2005.
"The Poverty of Growth with Interdependent Utility Functions,"
CESifo Working Paper Series
1470, CESifo Group Munich.
- Komlos, John & Salamon, Peter, 2008. "The poverty of growth with interdependent utility functions," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(6), pages 2242-2247, December.
- Salamon, Peter & Komlos, John, 2005. "The Poverty of Growth with Interdependent Utility Functions," Discussion Papers in Economics 619, University of Munich, Department of Economics.
- Fabio Maccheroni & Massimo Marinacci & Aldo Rustichini, 2008.
"Social Decision Theory: Choosing within and between Groups,"
Carlo Alberto Notebooks
71, Collegio Carlo Alberto.
- Fabio Maccheroni & Massimo Marinacci & Aldo Rustichini, 2012. "Social Decision Theory: Choosing within and between Groups," Review of Economic Studies, Oxford University Press, vol. 79(4), pages 1591-1636.
- Glazer, Amihai & Kanniainen, Vesa & Poutvaara, Panu, 2004.
"Initial Luck, Status-Seeking and Snowballs Lead to Corporate Success and Failure,"
IZA Discussion Papers
1426, Institute for the Study of Labor (IZA).
- Amihai Glazer & Vesa Kanniainen & Panu Poutvaara, 2004. "Initial Luck, Status-Seeking and Snowballs Lead to Corporate Success and Failure," CESifo Working Paper Series 1216, CESifo Group Munich.
- Kai A. Konrad & Florian Morath, 2011.
"Aspirations of the middle class: voting on redistribution and status concerns,"
aspirations_of_the_middle, Max Planck Institute for Tax Law and Public Finance.
- Konrad, Kai A. & Morath, Florian, 2011. "Aspirations of the middle class: Voting on redistribution and status concerns," Discussion Papers, Research Professorship & Project "The Future of Fiscal Federalism" SP II 2011-102, Social Science Research Center Berlin (WZB).
- Cardoso, Ana Rute, 2012. "Money and rank in the labor market," Economics Letters, Elsevier, vol. 115(2), pages 325-328.
- Ok, Efe A. & Sethi, Rajiv & Kockesen, Levent, 1997.
"Interdependent Preference Formation,"
97-18, C.V. Starr Center for Applied Economics, New York University.
- Edward P. Lazear & Kathryn L. Shaw, 2007.
"Personnel Economics: The Economist's View of Human Resources,"
NBER Working Papers
13653, National Bureau of Economic Research, Inc.
- Edward P. Lazear & Kathryn L. Shaw, 2007. "Personnel Economics: The Economist's View of Human Resources," Journal of Economic Perspectives, American Economic Association, vol. 21(4), pages 91-114, Fall.
- Greiner, Ben & Ockenfels, Axel & Werner, Peter, 2011.
"Wage transparency and performance: A real-effort experiment,"
Elsevier, vol. 111(3), pages 236-238, June.
- Ben Greiner & Axel Ockenfels & Peter Werner, 2010. "Wage Transparency and Performance: A Real-Effort Experiment," Working Paper Series in Economics 48, University of Cologne, Department of Economics.
- Alison L Booth & Gylfi Zoega, 2005. "Worker Heterogeneity, Intra-firm Externalities and Wage Compression," Birkbeck Working Papers in Economics and Finance 0515, Birkbeck, Department of Economics, Mathematics & Statistics.
- Stark, Oded & Hyll, Walter, 2011.
"On the economic architecture of the workplace: Repercussions of social comparisons among heterogeneous workers,"
28910, University Library of Munich, Germany.
- Oded Stark & Walter Hyll, 2011. "On the Economic Architecture of the Workplace: Repercussions of Social Comparisons among Heterogeneous Workers," Journal of Labor Economics, University of Chicago Press, vol. 29(2), pages 349 - 375.
- Hyll, Walter & Stark, Oded, 2011. "On the economic architecture of the workplace: repercussions of social comparisons amongst heterogeneous workers," University of Tuebingen Working Papers in Economics and Finance 6, University of Tuebingen, Faculty of Economics and Social Sciences.
- Kai A. Konrad & Florian Morath, 2011.
"Social Mobility and Redistributive Taxation,"
social_mobility_and_redis, Max Planck Institute for Tax Law and Public Finance.
- Konrad, Kai A. & Morath, Florian, 2010. "Social mobility and redistributive taxation," Discussion Papers, Research Professorship & Project "The Future of Fiscal Federalism" SP II 2010-15, Social Science Research Center Berlin (WZB).
- Konrad, Kai A. & Morath, Florian, 2010. "Social mobility and redistributive taxation," CEPR Discussion Papers 7997, C.E.P.R. Discussion Papers.
- Ghazala Azmat & Nagore Iriberri, 2009. "The importance of relative performance feedback information: evidence from a natural experiment using high school students," LSE Research Online Documents on Economics 28520, London School of Economics and Political Science, LSE Library.
- Kidd, Michael & Nicholas, Aaron & Rai, Birendra, 2013. "Tournament outcomes and prosocial behaviour," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 387-401.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.