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Competitive Preferences and Status as an Incentive: Experimental Evidence

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  • Gary Charness
  • David Masclet
  • Marie-Claire Villeval

Abstract

In this paper, we investigate individuals' investment in status in an environment where no monetary return can possibly be derived from reaching a better relative position. We use a real-effort experiment in which we permit individuals to learn and potentially improve their relative position in terms of performance. We find that people express a taste for status. People increase their effort when they are informed about their relative performance, and some individuals pay to sabotage others' output or to artificially increase their own performance although they are paid a flat wage. Introducing the opportunity to sabotage others' output exerts a negative effect on performance. Such effects can be alleviated by inducing group identity that favors positive rivalry but discourages sabotage among peers. Dans cet article, nous étudions la recherche de statut par les agents économiques dans un environnement où un meilleur statut ne procure pas nécessairement un avantage monétaire. Pour cela, nous avons réalisé une expérience en effort réel dans laquelle les agents sont amenés à fournir un niveau d'effort et sont informés de la performance de leurs collègues de travail. Nous observons que la plupart des gens ont un goût élevé pour la compétition et la recherche de statut au sein de leur groupe. Les individus augmentent leur niveau d'effort dès lors qu'ils sont informés de l'effort des autres. Certains sont même disposés à saboter l'effort des autres ou à accroitre artificiellement leur propre effort afin d'accroitre artificiellement leur statut.

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  • Gary Charness & David Masclet & Marie-Claire Villeval, 2011. "Competitive Preferences and Status as an Incentive: Experimental Evidence," CIRANO Working Papers 2011s-07, CIRANO.
  • Handle: RePEc:cir:cirwor:2011s-07
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    Cited by:

    1. Eriksson, Tor & Villeval, Marie Claire, 2012. "Respect and relational contracts," Journal of Economic Behavior & Organization, Elsevier, vol. 81(1), pages 286-298.
    2. repec:kap:expeco:v:20:y:2017:i:2:d:10.1007_s10683-016-9485-0 is not listed on IDEAS
    3. Nadja Kairies & Miriam Krieger, 2013. "How do Non-Monetary Performance Incentives for Physicians Affect the Quality of Medical Care? – A Laboratory Experiment," Ruhr Economic Papers 0414, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    4. repec:zbw:rwirep:0414 is not listed on IDEAS
    5. Loukas Balafoutas & Florian Lindner & Matthias Sutter, 2012. "Sabotage in Tournaments: Evidence from a Natural Experiment," Kyklos, Wiley Blackwell, vol. 65(4), pages 425-441, November.
    6. Ertac, Seda & Koçkesen, Levent & Ozdemir, Duygu, 2016. "The role of verifiability and privacy in the strategic provision of performance feedback: Theory and experimental evidence," Games and Economic Behavior, Elsevier, vol. 100(C), pages 24-45.
    7. Rustichini, Aldo & Villeval, Marie Claire, 2014. "Moral hypocrisy, power and social preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 107(PA), pages 10-24.
    8. Corgnet, Brice & Hernán-González, Roberto & Rassenti, Stephen, 2015. "Firing threats: Incentive effects and impression management," Games and Economic Behavior, Elsevier, vol. 91(C), pages 97-113.
    9. Dessi, Roberta & Miquel-Florensa, Josepa, 2013. "When to Pay More: Incentives, Culture and Status in Principal‐ Agent Interactions," TSE Working Papers 13-413, Toulouse School of Economics (TSE).
    10. Tran, Anh & Zeckhauser, Richard, 2012. "Rank as an inherent incentive: Evidence from a field experiment," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 645-650.
    11. Kamphorst, Jurjen J.A. & Swank, Otto H., 2013. "When Galatea cares about her reputation: How having faith in your workers reduces their motivation to shine," European Economic Review, Elsevier, vol. 60(C), pages 91-104.
    12. Kairies-Schwarz, Nadja & Krieger, Miriam, 2014. "How do Non-Monetary Performance Incentives for Physicians Affect the Quality of Medical Care? A Laboratory Experiment," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100583, Verein für Socialpolitik / German Economic Association.
    13. Brice Corgnet & Roberto Hernán-González & Stephen Rassenti, 2011. "Real Effort, Real Leisure and Real-time Supervision: Incentives and Peer Pressure in Virtual Organizations," Working Papers 11-05, Chapman University, Economic Science Institute.
    14. Kairies, Nadja & Krieger, Miriam, 2013. "How do Non-Monetary Performance Incentives for Physicians Affect the Quality of Medical Care? – A Laboratory Experiment," Ruhr Economic Papers 414, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    15. Peter Kuhn & Marie-Claire Villeval, 2011. "Do Women Prefer a Co-operative Work Environment?," Working Papers 1127, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    16. Seda Ertac & Mert Gumren & Levent Kockesen, 2017. "Strategic Feedback in Teams: Theory and Experimental Evidence," Koç University-TUSIAD Economic Research Forum Working Papers 1714, Koc University-TUSIAD Economic Research Forum.
    17. Yola Engler & Lionel Page, 2017. "Driving a Hard Bargain is a Balancing Act: How social preferences constrain the negotiation process," QuBE Working Papers 051, QUT Business School.

    More about this item

    Keywords

    Status seeking; rank; competitive preferences; experiment ; recherche de statut; classement; préférences compétitives; expérience;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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