Do Employees Care About Their Relative Position? Behavioural Evidence Focusing on Performance

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

No 231, School of Economics and Finance Discussion Papers and Working Papers Series from School of Economics and Finance, Queensland University of Technology

Abstract: Do employees care about their relative (economic) position among co-workers in an organization? And if so, does it raise or lower their performance? Behavioral evidence on these important questions is rare. This paper takes a novel approach to answering these questions, working with sports data from two different disciplines, basketball and soccer. These sports tournaments take place in a controlled environment defined by the rules of the game. We find considerable support that positional concerns and envy reduce individual performance. In contrast, there does not seem to be any tolerance for income disparity, based on the hope that such differences signal that better times are under way. Positive behavioral consequences are observed for those who are experiencing better times.

Keywords: Relative income; positional concerns; envy; social comparison; relative derivation; performance (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-lab, nep-ltv and nep-soc
Date: 2008-06-16, Revised 2008-06-16

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Working Paper: Do Employees Care about their Relative Position? Behavioural Evidence Focusing on Performance (2008)
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Persistent link: http://EconPapers.repec.org/RePEc:qut:dpaper:231

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