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On the value of relative comparisons in firms

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  • Ramalingam, Abhijit

Abstract

In a principal–agent model, we find that firms may not always benefit from the relative concerns of agents if such concerns are heterogeneous. Further, accounting for the influence of the environment on such concerns, profits are reduced relative to the no-comparisons benchmark.

Suggested Citation

  • Ramalingam, Abhijit, 2014. "On the value of relative comparisons in firms," Economics Letters, Elsevier, vol. 124(3), pages 446-448.
    • Handle: RePEc:eee:ecolet:v:124:y:2014:i:3:p:446-448
    DOI: 10.1016/j.econlet.2014.07.013
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    Cited by:

    1. Katarína Danková & Hodaka Morita & Maroš Servátka & Le Zhang, 2022. "Fairness concerns and job assignment to positions with different surplus," Southern Economic Journal, John Wiley & Sons, vol. 88(4), pages 1490-1516, April.
    2. repec:bla:annpce:v:89:y:2018:i:1:p:235-249 is not listed on IDEAS

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    More about this item

    Keywords

    Comparisons; Incentives; Context-dependence; Profits;
    All these keywords.

    JEL classification:

    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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