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Effort and Comparison Income: Experimental and Survey Evidence

Andrew Clark (), David Masclet () and Marie Claire Villeval ()

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: This paper considers the effect of status or relative income on work effort, combining experimental evidence from a gift-exchange game with the analysis of multi-country ISSP survey data. We find a consistent negative effect of others' incomes on individual effort in both datasets. The individual's rank in the income distribution is a stronger determinant of effort than is others' average income, suggesting that comparisons are more ordinal than cardinal. In the experiment, effort is also affected by comparisons over time: those who received higher income offers or enjoyed higher income rank in the past exert lower levels of effort for a given current income and rank.

Keywords: Effort; comparison income; rank; peak-end; experiments (search for similar items in EconPapers)
JEL-codes: M54 J33 A13 C92 D63 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe and nep-exp
Date: 2008-08
References: View references in EconPapers View complete reference list from CitEc
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http://cep.lse.ac.uk/pubs/download/dp0886.pdf (application/pdf)

Related works:
Journal Article: Effort and Comparison Income: Experimental and Survey Evidence (2010) Downloads
Working Paper: Effort and comparison income: experimental and survey evidence (2010) Downloads
Working Paper: Effort and comparison income: experimental and survey evidence (2008) Downloads
Working Paper: Effort and Comparison Income: Experimental and Survey Evidence (2006) Downloads
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