Inequity Aversion in Tournament

Dominique Demougin () and Claude Fluet

CIRANO Working Papers from CIRANO

Abstract: We consider the cost of providing incentives through tournaments when workers are inequity averse and performance evaluation is costly. The principal never benefits from empathy between the workers, but he may benefit from their propensity for envy depending on the costs of assessing performance. More envious employees are preferred when these costs are high, less envious ones when they are low. Nous analysons le coût des mécanismes incitatifs de type tournois lorsque les travailleurs ont de l'aversion pour l'iniquité et que l'évaluation des performances est coûteuse. L'empathie entre les travailleurs n'est jamais bénéfique pour le principal, mais une propension à l'envie peut être avantageuse selon l'importance des coûts associés à la mesure de la performance. Lorsque ces coûts sont élevés, le principal préférerait des travailleurs plus envieux; à l'inverse, il préférerait qu'ils le soient moins si ces coûts sont faibles.

Keywords: Tournaments; Inequity Aversion; Envy; Incentives; Performance; Tournois; aversion pour l'iniquité; envie; incitations; performance (search for similar items in EconPapers)
JEL-codes: D8 J4 (search for similar items in EconPapers)
Date: 2003-04-01
New Economics Papers: this item is included in nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Working Paper: Inequity Aversion in Tournaments (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:cir:cirwor:2003s-18

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