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Prizes versus Wages with Envy and Pride

Author

Listed:
  • Pradeep K. Dubey

    (Center for Game Theory, Department of Economics, SUNY at Stony Brook, Stony Brook, NY 11794, Cowles Foundation for Research in Economics, Yale University)

  • John Geanakoplos

    (Cowles Foundation, Yale University)

  • Ori Haimanko

    (Department of Economics, Ben-Gurion University of the Negev)

Abstract

We show that if agents are risk neutral, prizes outperform wages when 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).

Suggested Citation

  • Pradeep K. Dubey & John Geanakoplos & Ori Haimanko, 2005. "Prizes versus Wages with Envy and Pride," Cowles Foundation Discussion Papers 1537, Cowles Foundation for Research in Economics, Yale University.
    • Handle: RePEc:cwl:cwldpp:1537
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Koji Abe & Hajime Kobayashi & Hideo Suehiro, 2014. "Leadership in the Prisoner's Dilemma with Inequity-Averse Preferences," Discussion Papers 2014-09, Kobe University, Graduate School of Business Administration.
    2. Pradeep Dubey & John Geanakoplos & Ori Haimanko, 2013. "Prizes Versus Wages With Envy And Pride," The Japanese Economic Review, Japanese Economic Association, vol. 64(1), pages 98-121, March.
    3. Pradeep Dubey & John Geanakoplos, 2014. "Games with Money and Status: How Bes to Incentivize Work," Department of Economics Working Papers 14-02, Stony Brook University, Department of Economics.
    4. Jacqueline Volkman Wise, 2013. "Pension Portfolio Choice and Peer Envy," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 80(2), pages 461-489, June.
    5. Pradeep Dubey & John Geanakoplos, 2016. "Money and Status: How Best to Incentivize Work," Department of Economics Working Papers 16-02, Stony Brook University, Department of Economics.
    6. Pradeep Dubey & John Geanakoplos, 2020. "Money and Status in a Meritocracy," Department of Economics Working Papers 20-09, Stony Brook University, Department of Economics.

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    More about this item

    Keywords

    Envy; Pride; Wages; Prizes; Bonus;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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