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Relative Income Position and Performance: An Empirical Panel Analysis

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  • Benno Torgler

    (Yale Center for International and Area Studies)

  • Sascha L. Schmidt

    (University of St. Gallen)

  • Bruno S. Frey

    (University of Zurich)

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 Fondazione Eni Enrico Mattei in its series Working Papers with number 2006.39.

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Date of creation: Feb 2006
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Handle: RePEc:fem:femwpa:2006.39

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Keywords: Relative Income; Positional Concerns; Envy; Performance; Social Integration;

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References

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Citations

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Cited by:
  1. Abeler, Johannes & Altmann, Steffen & Kube, Sebastian & Wibral, Matthias, 2009. "Gift Exchange and Workers' Fairness Concerns: When Equality Is Unfair," IZA Discussion Papers 4262, Institute for the Study of Labor (IZA).
  2. 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 2006-04, Center for Research in Economics, Management and the Arts (CREMA).
  3. Tim Friehe & Mario Mechtel, 2013. "Gambling to Leapfrog in Status?," CESifo Working Paper Series 4174, CESifo Group Munich.
  4. 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).
  5. Tim Friehe & Mario Mechtel, 2012. "Conspicuous Consumption and Communism: Evidence from East and West Germany," CESifo Working Paper Series 3922, CESifo Group Munich.
  6. Pfeifer, Christian & Cornelißen, Thomas, 2010. "The impact of participation in sports on educational attainment--New evidence from Germany," Economics of Education Review, Elsevier, vol. 29(1), pages 94-103, February.
  7. Florian Baumann & Tim Friehe, 2013. "Status Concerns as a Motive for Crime?," CESifo Working Paper Series 4225, CESifo Group Munich.
  8. Saima Naeem & Asad Zaman, 2013. "For Love or Money? Motivating Workers," PIDE-Working Papers 2013:90, Pakistan Institute of Development Economics.
  9. Alex Bryson & Bernd Frick & Rob Simmons, 2009. "The returns to scarce talent: footedness and player remuneration in European soccer," LSE Research Online Documents on Economics 27784, London School of Economics and Political Science, LSE Library.

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