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Auszeichnungen: ein vernachlässigter Anreiz

Listed author(s):
  • Bruno S. Frey
  • Susanne Neckermann

The standard principal agent model considers monetary incentives only. It is assumed that money is more efficient than other forms of material, non-monetary compensation. Awards in the form of titles, orders, medals and honors (prizes)- though almost omnipresent - have so far escaped the attention of economists. They present extrinsic, non-monetary incentives that operate through the innate desire of human beings for recognition and status. In this article, we analyse the differences between monetary incentives and awards: in general, awards are cheap, lead to interpersonal relationships, are not directly related to performance and have a signalling value. In addition, they support intrinsic motivation, may increase social welfare and are exempt from taxation. Awards present an important additional instrument to be considered in principal agent theory. In many contexts they are superior to monetary compensation. Copyright Verein für Socialpolitik und Blackwell Publishers Ltd, 2006

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Paper provided by Center for Research in Economics, Management and the Arts (CREMA) in its series CREMA Working Paper Series with number 2005-14.

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Date of creation: Jun 2005
Handle: RePEc:cra:wpaper:2005-14
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  1. repec:pri:wwseco:dp230 is not listed on IDEAS
  2. Frey, Bruno S & Jegen, Reto, 2001. " Motivation Crowding Theory," Journal of Economic Surveys, Wiley Blackwell, vol. 15(5), pages 589-611, December.
  3. Edward P. Lazear, 1996. "Performance Pay and Productivity," NBER Working Papers 5672, National Bureau of Economic Research, Inc.
  4. Bruno S. Frey, 2005. "Knight Fever – Towards an Economics of Awards," CESifo Working Paper Series 1468, CESifo Group Munich.
  5. Benabou, Roland & Tirole, Jean, 2005. "Incentives and Prosocial Behavior," IZA Discussion Papers 1695, Institute for the Study of Labor (IZA).
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  7. Stutzer, Alois, 2004. "The role of income aspirations in individual happiness," Journal of Economic Behavior & Organization, Elsevier, vol. 54(1), pages 89-109, May.
  8. Bruno S. Frey & Margit Osterloh, 2005. "Yes, Managers Should Be Paid Like Bureaucrats," CESifo Working Paper Series 1379, CESifo Group Munich.
  9. Ernst Fehr & Armin Falk, 2002. "Psychological Foundations of Incentives," CESifo Working Paper Series 714, CESifo Group Munich.
  10. Gary S. Becker, 1974. "A Theory of Social Interactions," NBER Working Papers 0042, National Bureau of Economic Research, Inc.
  11. Marco Becht & Patrick Bolton & Ailsa Roell, 2003. "Corporate governance and control," ULB Institutional Repository 2013/13330, ULB -- Universite Libre de Bruxelles.
  12. Bohnet, Iris & Cooter, Robert, 2003. "Expressive Law: Framing or Equilibrium Selection?," Working Paper Series rwp03-046, Harvard University, John F. Kennedy School of Government.
  13. Lindbeck, Assar, 1985. "The Prize in Economic Science in Memory of Alfred Nobel," Journal of Economic Literature, American Economic Association, vol. 23(1), pages 37-56, March.
  14. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
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