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Status and Incentives

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  • Auriol, Emmanuelle
  • Renault, Régis

Abstract

This article introduces status as reflecting an agent's claim to recognition in her work. This is a scarce resource: increasing an agent's status requires that another agent's status be decreased. Higher-status agents are more willing to exert effort in exchange for money; better-paid agents would exert higher effort in exchange for improved status. The results are consistent with actual management practices: (i) egalitarianism is desirable in a static context; (ii) in a long-term work relationship, juniors' compensation is delayed; and (iii) past performance is rewarded by pay increases along with improved status within the organization's hierarchy. Copyright (c)2008, RAND.

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Bibliographic Info

Paper provided by Institut d'Économie Industrielle (IDEI), Toulouse in its series IDEI Working Papers with number 451.

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Date of creation: 2007
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Publication status: Published in The RAND Journal of Economics, vol.�39, n°1, Spring 2008, p.�305-326.
Handle: RePEc:ide:wpaper:6994

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