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Relative Income Position and Performance: An Empirical Panel Analysis

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  • Benno Torgler
  • Sascha L. Schmidt
  • Bruno S. Frey

Abstract

Many studies have established that people care a great deal about their relative economic position and not solely, as standard economic theory assumes, about their absolute economic position. However, behavioral evidence is rare. This paper provides an empirical analysis on how individuals? relative income position affects their performance. Using a unique data set for 1114 soccer players over a period of eight seasons (2833 observations), our analysis suggests that the larger the income differences within a team, the worse the performance of the soccer players is. The more the players are integrated in a particular social environment (their team), the more evident this negative effect is.

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Bibliographic Info

Paper provided by Center for Research in Economics, Management and the Arts (CREMA) in its series CREMA Working Paper Series with number 2006-03.

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Date of creation: Jan 2006
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Handle: RePEc:cra:wpaper:2006-03

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Keywords: Relative income; positional concerns; envy; performance; social integration;

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Citations

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Cited by:
  1. Justina A.V. Fischer & Benno Torgler, 2006. "Does Envy Destroy Social Fundamentals? The Impact of Relative Income Position on Social Capital," CREMA Working Paper Series, Center for Research in Economics, Management and the Arts (CREMA) 2006-04, Center for Research in Economics, Management and the Arts (CREMA).
  2. Baumann, Florian & Friehe, Tim, 2013. "Status concerns as a motive for crime?," DICE Discussion Papers 93, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
  3. Pfeifer, Christian & Cornelißen, Thomas, 2010. "The impact of participation in sports on educational attainment--New evidence from Germany," Economics of Education Review, Elsevier, Elsevier, vol. 29(1), pages 94-103, February.
  4. Dr Alex Bryson, 2009. "The Returns to Scarce Talent: Footedness and Player Remuneration in European Soccer," NIESR Discussion Papers, National Institute of Economic and Social Research 2395, National Institute of Economic and Social Research.
  5. Saima Naeem & Asad Zaman, 2013. "For Love or Money? Motivating Workers," PIDE-Working Papers, Pakistan Institute of Development Economics 2013:90, Pakistan Institute of Development Economics.
  6. Tim Friehe & Mario Mechtel, 2012. "Conspicuous Consumption and Communism: Evidence from East and West Germany," CESifo Working Paper Series 3922, CESifo Group Munich.
  7. Abeler, Johannes & Altmann, Steffen & Kube, Sebastian & Wibral, Matthias, 2006. "Reciprocity and Payment Schemes: When Equality Is Unfair," IZA Discussion Papers 2500, Institute for the Study of Labor (IZA).
  8. Johannes Abeler & Stefen Altmann & Sebastian Kube & Matthias Wibral, 2009. "Gift Exchange and Workers' Fairness Concerns - When Equality Is Unfair," Discussion Papers, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham 2009-11, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  9. Mario Mechtel & Tim Friehe, 2014. "Gambling to Leapfrog in Status?," IAAEU Discussion Papers, Institute of Labour Law and Industrial Relations in the European Union (IAAEU) 201404, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).

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