Prizes versus Wages with Envy and Pride

Pradeep Dubey (), John Geanakoplos () and Ori Haimanko ()
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Pradeep Dubey: Center for Game Theory, Department of Economics, SUNY at Stony Brook, Stony Brook, NY 11794, and Cowles Foundation for Research in Economics, Yale University, New Haven, CT 06520,USA
John Geanakoplos: Cowles Foundation for Research in Economics, Yale University, New Haven, CT 06520, USA
Ori Haimanko: Department of Economics, Ben-Gurion University of the Negev, Beer Sheva 84105, Israel

No 1101, Working Papers from Ben-Gurion University of the Negev, Department of Economics

Abstract: We show that if agents are risk neutral, prizes outperform wages if and only if 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 (search for similar items in EconPapers)
JEL-codes: C72 D01 D23 L14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hrm
Date: 2011
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