Prizes Versus Wages with Envy and Pride

26 Pages Posted: 19 Oct 2005

See all articles by Pradeep K. Dubey

Pradeep K. Dubey

SUNY Stony Brook - Center for Game Theory in Economics

John Geanakoplos

Yale University; Santa Fe Institute

Ori Haimanko

Ben-Gurion University of the Negev - Department of Economics; Yale University - Cowles Foundation

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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

Dubey, Pradeep K. and Geanakoplos, John D and Haimanko, Ori, Prizes Versus Wages with Envy and Pride (October 17, 2005). Cowles Foundation Discussion Paper No. 1537, Available at SSRN: https://ssrn.com/abstract=830924

Pradeep K. Dubey

SUNY Stony Brook - Center for Game Theory in Economics ( email )

Stony Brook, NY 11794
United States
631-632-7555 (Phone)
631-632-7516 (Fax)

John D Geanakoplos (Contact Author)

Yale University ( email )

30 Hillhouse Avenue
New Haven, CT 06511
United States
203-432-3397 (Phone)

HOME PAGE: http://https://economics.yale.edu/people/faculty/john-geanakoplos

Santa Fe Institute ( email )

1399 Hyde Park Road
Santa Fe, NM 87501
United States

Ori Haimanko

Ben-Gurion University of the Negev - Department of Economics ( email )

Beer-Sheva 84105
Israel

Yale University - Cowles Foundation ( email )

Box 208281
New Haven, CT 06520-8281
United States