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Auszeichnungen: ein vernachlässigter Anreiz

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  • Bruno S. Frey
  • Susanne Neckermann

Abstract

The standard principal agent model considers monetary incentives only. It is assumed that money is more efficient than other forms of material, non‐monetary compensation. Awards in the form of titles, orders, medals and honors (prizes)– though almost omnipresent – have so far escaped the attention of economists. They present extrinsic, non‐monetary incentives that operate through the innate desire of human beings for recognition and status. In this article, we analyse the differences between monetary incentives and awards: in general, awards are cheap, lead to interpersonal relationships, are not directly related to performance and have a signalling value. In addition, they support intrinsic motivation, may increase social welfare and are exempt from taxation. Awards present an important additional instrument to be considered in principal agent theory. In many contexts they are superior to monetary compensation.
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  • Bruno S. Frey & Susanne Neckermann, 2005. "Auszeichnungen: ein vernachlässigter Anreiz," CREMA Working Paper Series 2005-14, Center for Research in Economics, Management and the Arts (CREMA).
    • Handle: RePEc:cra:wpaper:2005-14
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    References listed on IDEAS

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    13. Bruno S. Frey, "undated". "Knight Fever towards an Economics of Awards," IEW - Working Papers 239, Institute for Empirical Research in Economics - University of Zurich.
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    Cited by:

    1. Bruno S. Frey & Susanne Neckermann, 2008. "Awards: A view from psychological economics," IEW - Working Papers 357, Institute for Empirical Research in Economics - University of Zurich.
    2. Hirsch, Bernhard & Schmiedke, Michael & Reemts, Stefan, 2009. "Anreizsysteme für Soldaten der Bundeswehr – Theoretische Analyse und Gestaltungsempfehlungen," ZögU - Zeitschrift für öffentliche und gemeinwirtschaftliche Unternehmen, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 32(1), pages 19-43.
    3. Christine Mayrhuber & Silvia Rocha-Akis, 2013. "Anreizsysteme zur Weiterbeschäftigung älterer Arbeitnehmerinnen und Arbeitnehmer," WIFO Studies, WIFO, number 46905.
    4. Gebhardt, Beate & Hellstern, Laura, 2023. "Die Kraft von Awards. Umfrage unter Unternehmen und Vergabeinstitutionen in Deutschland 2023," Working Papers 338798, Universitaet Hohenheim, Institute of Agricultural Policy and Agricultural Markets.

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    More about this item

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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