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Inequity Aversion in Tournament

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  • Dominique Demougin
  • Claude Denys Fluet

Abstract

We consider the cost of providing incentives through tournaments when workers are inequity averse and performance evaluation is costly. The principal never benefits from empathy between the workers, by he may benefit from their propensity for envy depending on the costs of assessing performance. More envious employees are preferred when these costs are high, less envious ones when they are low.
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Suggested Citation

  • Dominique Demougin & Claude Denys Fluet, 2003. "Inequity Aversion in Tournament," CIRANO Working Papers 2003s-18, CIRANO.
  • Handle: RePEc:cir:cirwor:2003s-18
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Tournaments; Inequity Aversion; Envy; Incentives; Performance; Tournois; aversion pour l'iniquité; envie; incitations; performance;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • J4 - Labor and Demographic Economics - - Particular Labor Markets

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