Prizes Versus Wages with Envy and Pride
26 Pages Posted: 19 Oct 2005
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Prizes Versus Wages with Envy and Pride
Prizes Versus Wages with Envy and Pride
Date Written: October 17, 2005
Abstract
We show that if agents are risk neutral, prizes outperform wages when there is sufficient pride and envy relative to the noisiness of performance. If agents are risk averse, prizes are a necessary supplement to wages (as bonuses).
Keywords: Envy, Pride, Wages, Prizes, Bonus
JEL Classification: C72, D01, D23, L14
Suggested Citation: Suggested Citation
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