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Killer Incentives: Status Competition and Pilot Performance during World War II

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  • Philipp Ager
  • Leonardo Bursztyn
  • Hans-Joachim Voth

Abstract

A growing theoretical and empirical literature shows that public recognition can lead employees to exert greater effort. However, status competition is also associated with excessive expenditure on status goods, greater likelihood of bankruptcy, and more risk taking by money managers. This paper examines the effects of recognition and status competition jointly. In particular, we focus on the spillover effects of public recognition on the performance and risk taking of peers. Using newly collected data on monthly “victory” scores of more than 5,000 German pilots during World War II, we find that status competition had important effects: After the German armed forces bulletin mentioned the accomplishments of a particular fighter pilot, his former peers performed considerably better. This outperformance varied across skill groups. When a former squadron peer was mentioned, the best pilots tried harder, scored more, and died no more frequently; in contrast, average pilots won only a few additional victories but died at a significantly higher rate. Hence our results show that the overall efficiency effect of nonfinancial rewards can be ambiguous in settings where both risk and output affect aggregate performance.

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  • Philipp Ager & Leonardo Bursztyn & Hans-Joachim Voth, 2016. "Killer Incentives: Status Competition and Pilot Performance during World War II," NBER Working Papers 22992, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:22992
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    Cited by:

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    2. Gwen-Jiro Clochard & Guillaume Hollard & Julia Wirtz, 2022. "More effort or better technologies? On the effect of relative performance feedback," Bristol Economics Discussion Papers 22/767, School of Economics, University of Bristol, UK.
    3. Marie Claire Villeval, 2020. "Performance Feedback and Peer Effects," Working Papers 2009, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    4. Roulleau-Pasdeloup, Jordan, 2020. "A Puncher’s chance: Expected gain and risk taking in a market for superstars," Labour Economics, Elsevier, vol. 66(C).
    5. Yu Wu & Yingyi Hu, 2021. "Chinese-style incentives: The intraindustry ripple effects of CEO awards," PLOS ONE, Public Library of Science, vol. 16(6), pages 1-18, June.
    6. Kiessling, Lukas & Radbruch, Jonas & Schaube, Sebastian, 2018. "The Impact of Self-Selection on Performance," IZA Discussion Papers 11365, Institute of Labor Economics (IZA).
    7. Marie Claire Villeval, 2020. "Performance Feedback and Peer Effects," Post-Print halshs-02909726, HAL.
    8. Voth, Hans-Joachim & Xu, Guo, 2020. "Encouraging Others: Punishment and Performance in the Royal Navy," CEPR Discussion Papers 14476, C.E.P.R. Discussion Papers.
    9. Marie Claire Villeval, 2020. "Performance Feedback and Peer Effects," Working Papers halshs-02488913, HAL.
    10. Raja Kali & David Pastoriza & Jean‐François Plante, 2018. "The burden of glory: Competing for nonmonetary incentives in rank‐order tournaments," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 27(1), pages 102-118, March.
    11. Richard B. Freeman & Wei Huang & Teng Li, 2019. "Non-linear Incentives, Worker Productivity, and Firm Profits: Evidence from a Quasi-experiment," NBER Working Papers 25507, National Bureau of Economic Research, Inc.
    12. Berlinski, Samuel & Ramos, Alejandra, 2020. "Peer effects in the decision to apply for a professional excellence award," Labour Economics, Elsevier, vol. 67(C).
    13. Leonardo Bursztyn & Robert Jensen, 2017. "Social Image and Economic Behavior in the Field: Identifying, Understanding, and Shaping Social Pressure," Annual Review of Economics, Annual Reviews, vol. 9(1), pages 131-153, September.
    14. Linus Siming, 2017. "Government awards as economic instruments of governance," Post-Print hal-01625711, HAL.
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    16. Li, Teng & Lu, Runjing, 2022. "Social undermining as a dark side of symbolic awards: Evidence from a regression discontinuity design," Organizational Behavior and Human Decision Processes, Elsevier, vol. 173(C).
    17. Voth, Hans-Joachim & Caprettini, Bruno, 2018. "From Welfare to Warfare: New Deal Spending and Patriotism During World War II," CEPR Discussion Papers 12807, C.E.P.R. Discussion Papers.
    18. Lorenz Götte & Egon Tripodi, 2022. "Social Recognition: Experimental Evidence from Blood Donors," CESifo Working Paper Series 9719, CESifo.

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    More about this item

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-
    • Z00 - Other Special Topics - - General - - - General

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