Prizes versus Wages with Envy and Pride
AbstractWe show that if agents are risk neutral, prizes outperform wages if and only if there is sufficient pride and envy relative to the noisiness of performance. If agents are risk averse, prizes are a necessary supplement to wages (as bonuses).
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Bibliographic InfoPaper provided by Ben-Gurion University of the Negev, Department of Economics in its series Working Papers with number 1101.
Length: 27 pages
Date of creation: 2011
Date of revision:
Envy; Pride; Wages; Prizes; Bonus;
Find related papers by JEL classification:
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- D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
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- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
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