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 Cowles Foundation for Research in Economics, Yale University in its series Cowles Foundation Discussion Papers with number 1835.
Length: 26 pages
Date of creation: Nov 2011
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Find related papers by 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-12-13 (All new papers)
- NEP-GTH-2011-12-13 (Game Theory)
- NEP-HRM-2011-12-13 (Human Capital & Human Resource Management)
- NEP-MIC-2011-12-13 (Microeconomics)
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