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Status and Incentives

Author

Listed:
  • 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)

Abstract

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.

Suggested Citation

  • Emmanuelle Auriol & Régis Renault, 2007. "Status and Incentives," THEMA Working Papers 2007-01, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    • Handle: RePEc:ema:worpap:2007-01
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    File URL: http://thema.u-cergy.fr/IMG/documents/2007-01.pdf
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    More about this item

    Keywords

    repeated moral hazard; internal labor markets; social status;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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