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Effort and Comparison Income: Experimental and Survey Evidence

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Author Info
Andrew E. Clark () (PSE and IZA Bonn)
David Masclet () (CNRS and CREM)
Marie-Claire Villeval () (CNRS, GATE and IZA Bonn)

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Abstract

This paper considers the effect of status or relative income on work effort combining experimental evidence from a gift-exchange game with ISSP survey data. We find a consistent negative effect of others’ incomes on individual effort in both datasets. The individual’s rank in the income distribution is a stronger determinant of effort than others’ average income, suggesting that comparisons are more ordinal than cardinal. We then show that effort is also affected by comparisons over time: those who received higher income offers or had higher income rank in the past exert lower levels of effort for a given current income and rank.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2169.

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Length: 34 pages
Date of creation: Jun 2006
Date of revision:
Handle: RePEc:iza:izadps:dp2169

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Related research
Keywords: effort; comparison income; rank; peak-end; experiments;

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Find related papers by JEL classification:
M54 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Labor Management
J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Tor Eriksson & Marie-Claire Villeval, 2008. "Performance Pay, Sorting and Social Motivation," Post-Print halshs-00331753_v1, HAL. [Downloadable!]
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  2. Carmen Herrero & Juan D. Moreno-Ternero, 2009. "Estimating production costs in the economic evaluation of health-care programs," Health Economics, John Wiley & Sons, Ltd., vol. 18(1), pages 21-35. [Downloadable!]
  3. Gächter, Simon & Nosenzo, Daniele & Sefton, Martin, 2008. "The Impact of Social Comparisons on Reciprocity," IZA Discussion Papers 3639, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  4. Dohmen Thomas & Falk Armin & Huffman David & Sunde Uwe, 2008. "Homo Reciprocans: Survey Evidence on Behavioural Outcomes," Research Memoranda 007, Maastricht : ROA, Research Centre for Education and the Labour Market. [Downloadable!]
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