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Looking Awkward When Winning and Foolish When Losing: Inequity Aversion and Performance in the Field

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  • Benno Torgler
  • Markus Schaffner
  • Bruno S. Frey
  • Sascha L. Schmidt

Abstract

The experimental literature and studies using survey data 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. Individuals are concerned about social comparisons. However, behavioral evidence in the field is rare. This paper provides an empirical analysis testing the model of inequity aversion using two unique panel data sets for basketball and soccer players. We find support that the concept of inequity aversion helps to understand how the relative income situation affects performance in a real competitive environment with real tasks and real incentives.

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Bibliographic Info

Paper provided by Institute for Empirical Research in Economics - University of Zurich in its series IEW - Working Papers with number 369.

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Date of creation: May 2008
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Handle: RePEc:zur:iewwpx:369

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Keywords: Inequity aversion; relative income; positional concerns; envy; social comparison; performance; interdependent preferences;

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Cited by:
  1. Brandes, Leif & Franck, Egon, 2012. "Social preferences or personal career concerns? Field evidence on positive and negative reciprocity in the workplace," Journal of Economic Psychology, Elsevier, vol. 33(5), pages 925-939.
  2. Sabrina Teyssier, 2008. "Experimental Evidence on Inequity Aversion and Self-Selection between Incentive Contracts," Post-Print halshs-00303727, HAL.
  3. Papahristodoulou, Christos, 2012. "A NLIP Model on Wage Dispersion and Team Performance," MPRA Paper 39149, University Library of Munich, Germany.

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