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Inequity Aversion in Tournaments

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  • Dominique Demougin
  • Claude Fluet

Abstract

We consider the cost of providing incentives through tournaments when workers are inequity averse and performance evaluation is costly. The principal never benefits from empathy between the workers, by he may benefit from their propensity for envy depending on the costs of assessing performance. More envious employees are preferred when these costs are high, less envious ones when they are low.

Suggested Citation

  • Dominique Demougin & Claude Fluet, 2003. "Inequity Aversion in Tournaments," Cahiers de recherche 0322, CIRPEE.
    • Handle: RePEc:lvl:lacicr:0322
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    References listed on IDEAS

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    More about this item

    Keywords

    Tournaments; Inequity aversion; Envy; Incentives; Performance;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • J4 - Labor and Demographic Economics - - Particular Labor Markets

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    This paper has been announced in the following NEP Reports:

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