Games of Status and Discrininatory Contract

Amrita Dhillon () and Alexander Herzog-Stein

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: Following recent empirical evidence which indicates the importance of rank for the determination of workers’ wellbeing, this paper introduces status seeking preferences in the form of rank-dependent utility functions into a moral hazard framework with one firm and multiple workers, but no correlation in production. Workers’ concern for the rank of their wage in the firm’s wage distribution may induce the firm to offer discriminatory wage contracts when its aim is to induce all workers to expend effort.

Pages: 46 pages
Date: 2006
New Economics Papers: this item is included in nep-gth and nep-upt
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Citations: View citations in EconPapers (3)

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https://warwick.ac.uk/fac/soc/economics/research/w ... s/2006/twerp_759.pdf

Related works:
Journal Article: Games of status and discriminatory contracts (2009)
Working Paper: Games of Status and Discriminatory Contracts (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:759

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