Status and incentives

Emmanuelle Auriol () and Régis Renault

RAND Journal of Economics, 2008, vol. 39, issue 1, pages 305-326

Abstract: This article introduces status as reflecting an agent's claim to recognition in her work. This is a scarce resource: increasing an agent's status requires that another agent's status be decreased. Higher-status agents are more willing to exert effort in exchange for money; better-paid agents would exert higher effort in exchange for improved status. The results are consistent with actual management practices: (i) egalitarianism is desirable in a static context; (ii) in a long-term work relationship, juniors' compensation is delayed; and (iii) past performance is rewarded by pay increases along with improved status within the organization's hierarchy. Copyright (c)2008, RAND.

Date: 2008

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Working Paper: Status and Incentives (2007)
Working Paper: Status and Incentives (2007)
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