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Relative Income Position And Performance: An Empirical Panel Analysis

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Author Info
Benno Torgler
Sascha L. Schmidt
Bruno S. Frey

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Abstract

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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Paper provided by Institute for Empirical Research in Economics - IEW in its series IEW - Working Papers with number iewwp268.

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Date of creation: Jan 2006
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Handle: RePEc:zur:iewwpx:268

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Related research
Keywords: Relative income; positional concerns; envy; performance; social integration;

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Find related papers by JEL classification:
D00 - Microeconomics - - General - - - General
D60 - Microeconomics - - Welfare Economics - - - General
L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Recreation; Tourism

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Justina A.V. Fischer & Benno Torgler, 2006. "Does Envy Destroy Social Fundamentals? The Impact Of Relative Income Position On Social Capital," STICERD - Development Economics Papers 46, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE. [Downloadable!]
    Other versions:
  2. Johannes Abeler & Steffen Altmann & Sebastian Kube & Matthias Wibral, 2006. "Reciprocity and Payment Schemes: When Equality Is Unfair," IZA Discussion Papers 2500, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  3. Thomas Cornelißen & Christian Pfeifer, 2007. "The Impact of Participation in Sports on Educational Attainment: New Evidence from Germany," SOEPpapers 68, DIW Berlin, The German Socio-Economic Panel (SOEP). [Downloadable!]
    Other versions:
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