IDEAS home Printed from https://ideas.repec.org/a/eee/pubeco/v96y2012i9p645-650.html
   My bibliography  Save this article

Rank as an inherent incentive: Evidence from a field experiment

Author

Listed:
  • Tran, Anh
  • Zeckhauser, Richard

Abstract

Money is the prime incentive considered in economic models. However, recent evidence indicates that people are also greatly concerned about their social rankings. Is this solely because rank brings tangible benefits, or because in addition people have an inherent preference for high rank? This paper deployed a field experiment that provides evidence for an inherent preference. In the experiment, Vietnamese students enrolled in an English course performed significantly better on the official standardized international final test when they were told their rankings on practice tests than when they were not. This result held even when this ranking information could not be reliably communicated, thus severely attenuating the potential to bring tangible or status benefits.

Suggested Citation

  • Tran, Anh & Zeckhauser, Richard, 2012. "Rank as an inherent incentive: Evidence from a field experiment," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 645-650.
    • Handle: RePEc:eee:pubeco:v:96:y:2012:i:9:p:645-650
    DOI: 10.1016/j.jpubeco.2012.05.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0047272712000436
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jpubeco.2012.05.004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Azmat, Ghazala & Iriberri, Nagore, 2010. "The importance of relative performance feedback information: Evidence from a natural experiment using high school students," Journal of Public Economics, Elsevier, vol. 94(7-8), pages 435-452, August.
    2. Gary Charness & Matthew Rabin, 2002. "Understanding Social Preferences with Simple Tests," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(3), pages 817-869.
    3. Michele Piccione & Ariel Rubinstein, 2008. "Luxury Prices: An Expository Note," The Japanese Economic Review, Japanese Economic Association, vol. 59(1), pages 127-132, March.
    4. Alexandre Mas & Enrico Moretti, 2009. "Peers at Work," American Economic Review, American Economic Association, vol. 99(1), pages 112-145, March.
    5. Frank, Robert H, 1985. "The Demand for Unobservable and Other Nonpositional Goods," American Economic Review, American Economic Association, vol. 75(1), pages 101-116, March.
    6. Ireland, Norman J., 1998. "Status-seeking, income taxation and efficiency," Journal of Public Economics, Elsevier, vol. 70(1), pages 99-113, October.
    7. B. Curtis Eaton & Mukesh Eswaran, 2003. "The evolution of preferences and competition: a rationalization of Veblen's theory of invidious comparisons," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 36(4), pages 832-859, November.
    8. Eriksson, Tor & Poulsen, Anders & Villeval, Marie Claire, 2009. "Feedback and incentives: Experimental evidence," Labour Economics, Elsevier, vol. 16(6), pages 679-688, December.
    9. Congleton, Roger D., 1989. "Efficient status seeking: Externalities, and the evolution of status games," Journal of Economic Behavior & Organization, Elsevier, vol. 11(2), pages 175-190, March.
    10. Erzo F. P. Luttmer, 2005. "Neighbors as Negatives: Relative Earnings and Well-Being," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(3), pages 963-1002.
    11. Gary Charness & David Masclet & Marie-Claire Villeval, 2010. "Competitive Preferences and Status as an Incentive : Experimental Evidence," Working Papers 1016, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    12. Armin Falk & Andrea Ichino, 2006. "Clean Evidence on Peer Effects," Journal of Labor Economics, University of Chicago Press, vol. 24(1), pages 39-58, January.
    13. Jordi Blanes i Vidal & Mareike Nossol, 2011. "Tournaments Without Prizes: Evidence from Personnel Records," Management Science, INFORMS, vol. 57(10), pages 1721-1736, October.
    14. Charness, Gary & Grosskopf, Brit, 2001. "Relative payoffs and happiness: an experimental study," Journal of Economic Behavior & Organization, Elsevier, vol. 45(3), pages 301-328, July.
    15. Luis Rayo & Gary S. Becker, 2007. "Habits, Peers, and Happiness: An Evolutionary Perspective," American Economic Review, American Economic Association, vol. 97(2), pages 487-491, May.
    16. Pesendorfer, Wolfgang, 1995. "Design Innovation and Fashion Cycles," American Economic Review, American Economic Association, vol. 85(4), pages 771-792, September.
    17. Sheryl Ball & Catherine Eckel & Philip J. Grossman & William Zame, 2001. "Status in Markets," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(1), pages 161-188.
    18. Camelia M. Kuhnen & Agnieszka Tymula, 2012. "Feedback, Self-Esteem, and Performance in Organizations," Management Science, INFORMS, vol. 58(1), pages 94-113, January.
    19. Robert J. Oxoby, 2004. "Cognitive dissonance, status and growth of the underclass," Economic Journal, Royal Economic Society, vol. 114(498), pages 727-749, October.
    20. Ireland, Norman J., 1994. "On limiting the market for status signals," Journal of Public Economics, Elsevier, vol. 53(1), pages 91-110, January.
    21. Larry Samuelson, 2004. "Information-Based Relative Consumption Effects," Econometrica, Econometric Society, vol. 72(1), pages 93-118, January.
    22. Duffy, John & Kornienko, Tatiana, 2010. "Does competition affect giving?," Journal of Economic Behavior & Organization, Elsevier, vol. 74(1-2), pages 82-103, May.
    23. Ng, Yew-Kwang, 1987. "Diamonds Are a Government's Best Friend: Burden-Free Taxes on Goods Valued for Their Values," American Economic Review, American Economic Association, vol. 77(1), pages 186-191, March.
    24. Bagwell, Laurie Simon & Bernheim, B Douglas, 1996. "Veblen Effects in a Theory of Conspicuous Consumption," American Economic Review, American Economic Association, vol. 86(3), pages 349-373, June.
    25. Ireland, N. J., 2001. "Optimal income tax in the presence of status effects," Journal of Public Economics, Elsevier, vol. 81(2), pages 193-212, August.
    26. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(3), pages 355-374.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Perez Truglia, Ricardo Nicolas, 2007. "Conspicuous consumption in the land of Prince Charming," MPRA Paper 22009, University Library of Munich, Germany, revised 22 Mar 2010.
    2. Gary Charness & David Masclet & Marie Claire Villeval, 2014. "The Dark Side of Competition for Status," Management Science, INFORMS, vol. 60(1), pages 38-55, January.
    3. Gary Charness & David Masclet & Marie Claire Villeval, 2014. "The Dark Side of Competition for Status (preprint)," Working Papers halshs-01090241, HAL.
    4. Bilancini, Ennio & Boncinelli, Leonardo, 2012. "Redistribution and the notion of social status," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 651-657.
    5. Ghazala Azmat & Nagore Iriberri, 2010. "The provision of relative performance feedback information: An experimental analysis of performance and happiness," Economics Working Papers 1216, Department of Economics and Business, Universitat Pompeu Fabra.
    6. Bilancini, Ennio & Boncinelli, Leonardo, 2019. "Wage inequality, labor income taxes, and the notion of social status," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 13, pages 1-35.
    7. Reyniers, Diane, 2018. "Peers and productivity: Evidence from an experimental factory," MPRA Paper 91215, University Library of Munich, Germany.
    8. Bronsert, Anne-Kathrin & Glazer, Amihai & Konrad, Kai A., 2014. "Old Money, the Nouveau Riche and Brunhilde's Marriage Dilemma," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100385, Verein für Socialpolitik / German Economic Association.
    9. Anne-Kathrin Bronsert & Amihai Glazer & Kai A. Konrad, 2017. "Old money, the nouveaux riches and Brunhilde’s marriage strategy," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(1), pages 163-186, January.
    10. Anne-Kathrin Bronsert & Amihai Glazer & Kai A. Konrad, 2014. "Old Money, the Nouveaux Riches and Brunhilde’s Marriage Strategy," Working Papers tax-mpg-rps-2014-15, Max Planck Institute for Tax Law and Public Finance.
    11. Beugnot, Julie & Fortin, Bernard & Lacroix, Guy & Villeval, Marie Claire, 2019. "Gender and peer effects on performance in social networks," European Economic Review, Elsevier, vol. 113(C), pages 207-224.
    12. König, Tobias & Lausen, Tobias, 2016. "Relative consumption preferences and public provision of private goods," Discussion Papers, Research Unit: Market Behavior SP II 2016-213, WZB Berlin Social Science Center.
    13. Camelia M. Kuhnen & Agnieszka Tymula, 2012. "Feedback, Self-Esteem, and Performance in Organizations," Management Science, INFORMS, vol. 58(1), pages 94-113, January.
    14. Richard Murphy & Felix Weinhardt, 2020. "Top of the Class: The Importance of Ordinal Rank," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 87(6), pages 2777-2826.
    15. C. Bram Cadsby & Jim Engle-Warnick & Tony Fang & Fei Song, 2014. "Psychological Incentives, Financial Incentives, and Risk Attitudes in Tournaments: An Artefactual Field Experiment," Working Papers 1403, University of Guelph, Department of Economics and Finance.
    16. Beugnot, Julie & Fortin, Bernard & Lacroix, Guy & Villeval, Marie Claire, 2017. "Gender and Peer Effects in Social Networks," IZA Discussion Papers 10588, Institute of Labor Economics (IZA).
    17. Guillaume Roels & Xuanming Su, 2014. "Optimal Design of Social Comparison Effects: Setting Reference Groups and Reference Points," Management Science, INFORMS, vol. 60(3), pages 606-627, March.
    18. David Gill & Zdenka Kissová & Jaesun Lee & Victoria Prowse, 2019. "First-Place Loving and Last-Place Loathing: How Rank in the Distribution of Performance Affects Effort Provision," Management Science, INFORMS, vol. 65(2), pages 494-507, February.
    19. Delavallade, Clara, 2021. "Motivating teams: Private feedback and public recognition at work," Journal of Public Economics, Elsevier, vol. 197(C).
    20. Kairies-Schwarz, Nadja & Krieger, Miriam, 2014. "How do Non-Monetary Performance Incentives for Physicians Affect the Quality of Medical Care? A Laboratory Experiment," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100583, Verein für Socialpolitik / German Economic Association.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:pubeco:v:96:y:2012:i:9:p:645-650. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505578 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.