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Status and Incentives

  • Emmanuelle Auriol

    (ARQADE and IDEI, Université des Sciences Sociales de Toulouse, and Institut Universitaire de France)

  • Régis Renault

    ()

    (Université de Cergy-Pontoise, Théma and Institut Universitaire de France)

The paper introduces status as reflecting an agent's claim to recognition in her work. It is a scarce resource: increasing an agent's status requires that another agent's status is decreased. Higher status agents are more willing to exert effort in exchange for money; better-paid agents would exert a higher effort in exchange for an improved status. Results are coherent with actual management practices: (i) egalitarianism is desirable in a static context; (ii) in a long-term work relationship, juniors' compensations are delayed; past performances are recompensed by pay increases along with an improved status within the organization's hierarchy.

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Paper provided by THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise in its series THEMA Working Papers with number 2007-01.

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Date of creation: 2007
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Handle: RePEc:ema:worpap:2007-01
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