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Do Employees Care About Their Relative Position? Behavioural Evidence Focusing on Performance

Author

Listed:
  • Benno Torgler

    () (QUT)

  • Markus Schaffner

    () (QUT)

  • 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," School of Economics and Finance Discussion Papers and Working Papers Series 231, School of Economics and Finance, Queensland University of Technology, revised 16 Jun 2008.
  • Handle: RePEc:qut:dpaper:231
    as

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    File URL: http://external-apps.qut.edu.au/business/documents/discussionPapers/2008/231Torgler.pdf
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. Angelova, Vera & Güth, Werner & Kocher, Martin G., 2012. "Co-employment of permanently and temporarily employed agents," Labour Economics, Elsevier, vol. 19(1), pages 48-58.

    More about this item

    Keywords

    Relative income; positional concerns; envy; social comparison; relative derivation; performance;

    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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