A Crowding-out Effect for Relative Income

Benno Torgler (), Bruno S. Frey, Markus Schaffner () and Sascha L. Schmidt

CREMA Working Paper Series from Center for Research in Economics, Management and the Arts (CREMA)

Abstract: The risk of external interventions crowding-out intrinsic motivation has long been established in economics. This paper introduces a new dimension by arguing that a crowding-out effect does become possible if individuals receive higher relative compensation. Using a unique, large data set that focuses on 26 seasons in basketball (NBA) we find empirical support for a relative crowding-out effect. Performance is reduced as a reaction to a relative income advantage.

Keywords: Crowding-out; relative income; positional concerns; motivation (search for similar items in EconPapers)
JEL-codes: D00 D60 L83 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-lab and nep-ltv
Date: Written 2008-09

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Related works:
Working Paper: A Crowding-Out Effect for Relative Income (2008)
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Persistent link: http://EconPapers.repec.org/RePEc:cra:wpaper:2008-20

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