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Do Employees Care about their Relative Position? Behavioural Evidence Focusing on Performance

Author

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

Abstract

Do employees care about their relative (economic) position among co-workers in an organization? And if so, does it raise or lower their performance? Behavioral evidence on these important questions is rare. This paper takes a novel approach to answering these questions, working with sports data from two different disciplines, basketball and soccer. These sports tournaments take place in a controlled environment defined by the rules of the game. We find considerable support that positional concerns and envy reduce individual performance. In contrast, there does not seem to be any tolerance for income disparity, based on the hope that such differences signal that better times are under way. Positive behavioral consequences are observed for those who are experiencing better times.

Suggested Citation

  • Benno Torgler & Markus Schaffner & Sascha L. Schmidt & Bruno S. Frey, 2008. "Do Employees Care about their Relative Position? Behavioural Evidence Focusing on Performance," CREMA Working Paper Series 2008-12, Center for Research in Economics, Management and the Arts (CREMA).
  • Handle: RePEc:cra:wpaper:2008-12
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    References listed on IDEAS

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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. How inequality makes us poorer
      by chris in Stumbling and Mumbling on 2019-05-17 12:31:43

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    2. Egon Franck & Stephan Nüesch, 2012. "Talent And/Or Popularity: What Does It Take To Be A Superstar?," Economic Inquiry, Western Economic Association International, vol. 50(1), pages 202-216, January.

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    More about this item

    Keywords

    Relative income; positional concerns; envy; social comparison; relative derivation; performance;
    All these keywords.

    JEL classification:

    • D00 - Microeconomics - - General - - - General
    • D60 - Microeconomics - - Welfare Economics - - - General
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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