Envy Manipulation at Work

Caserta Maurizio, Ferrante Livio () and Reito Francesco
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Caserta Maurizio: Department of Economics and Business, University of Catania, Catania, Italy
Ferrante Livio: Department of Economics and Business, University of Catania, Corso Italia 55, 95129, Catania, Italy
Reito Francesco: Department of Economics and Business, University of Catania, Catania, Italy

The B.E. Journal of Theoretical Economics, 2021, vol. 21, issue 1, 287-314

Abstract: We present a simple principal-agent model with an employer and two types of employees/workers, low and high skilled. Low-skilled workers are envious of their high-skilled peers, and incur a disutility cost whenever the latter receive a positive surplus from their labor contract. We show that: i) if the envy cost is relatively low (high), high-skilled workers obtain a payoff higher (lower) than that they receive when they are not envied; ii) if the envy cost can be manipulated (increased or reduced), high-skilled workers can take actions of envy-provocation or envy-reduction to further increase their payoff.

Keywords: envy; principal-agent model; other-regarding preferences (search for similar items in EconPapers)
JEL-codes: D82 J33 M52 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1515/bejte-2019-0161

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