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Effort and comparison income: experimental and survey evidence

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

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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: J33 M54 C92 A13 D63 (search for similar items in EconPapers)
Date: 2008
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http://eprints.lse.ac.uk/28502/ Open access version. (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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