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The Power of Positional Concerns: A 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 1040 soccer players over a period of eight seasons, 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. Moreover, we find that positional effects lowering performance are stronger among high performing teams.

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Paper provided by Center for Research in Economics, Management and the Arts (CREMA) in its series CREMA Working Paper Series with number 2006-19.

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Date of creation: May 2006
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Handle: RePEc:cra:wpaper:2006-19

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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, 2007. "Social capital and relative income concerns: evidence from 26 countries," University of St. Gallen Department of Economics working paper series 2007, Department of Economics, University of St. Gallen 2007-05, Department of Economics, University of St. Gallen.
  2. Martin Gächter & David A. Savage & Benno Torgler, 2013. "Retaining the thin blue line: What shapes workers' intentions not to quit the current work environment," International Journal of Social Economics, Emerald Group Publishing, vol. 40(5), pages 479-503, May.
  3. Markus Schaffner & Benno Torgler, 2008. "Meet the Joneses: An Empirical Investigation of Reference Groups in Relative Income Position Comparisons," CREMA Working Paper Series, Center for Research in Economics, Management and the Arts (CREMA) 2008-13, Center for Research in Economics, Management and the Arts (CREMA).
  4. David Stadelmann & Reiner Eichenberger, 2008. "Wer ist der beste Formel 1 Fahrer? Eine ökonometrische Talentbewertung," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, Verein für Socialpolitik, vol. 9(4), pages 486-512, November.
  5. Lampi, Elina & Nordblom, Katarina, 2010. "Money and success - Sibling and birth-order effects on positional concerns," Journal of Economic Psychology, Elsevier, Elsevier, vol. 31(1), pages 131-142, February.
  6. Justina A V Fischer & Benno Torgler, 2011. "Do Positional Concerns Destroy Social Capital: Evidence from 26 Countries," School of Economics and Finance Discussion Papers and Working Papers Series, School of Economics and Finance, Queensland University of Technology 265, School of Economics and Finance, Queensland University of Technology.

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