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

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

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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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Paper provided by Institute for Empirical Research in Economics - IEW in its series IEW - Working Papers with number iewwp369.

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

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

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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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