The Dark Side of Peers: Demotivation through Social Comparison in Networks

Frédéric Deroïan () and Mohamed Belhaj ()
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Frédéric Deroïan: AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique
Mohamed Belhaj: AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique, ECM - École Centrale de Marseille

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Abstract: This paper introduces demotivation in the context of social comparison in networks. Social comparison is modeled as a status effect rewarding or penalizing agents according to their relative performance with respect to local peers. A demotivated agent faces both a reduced marginal return to effort and a psychological cost. In the absence of demotivation, social comparison leads to higher effort levels but reduces equilibrium welfare. Introducing demotivation leads to two main findings. First, it generates a network game of strategic substitutes. Second, despite the individual psychological costs incurred by demotivated agents, it can enhance overall welfare—by alleviating social pressure to exert effort and by generating positive externalities for peers.

Keywords: Social Comparison; Demotivation; Networks; Strategic Substitutes; Equilibrium Welfare (search for similar items in EconPapers)
Date: 2025-05-20
Note: View the original document on HAL open archive server: https://hal.science/hal-05075017v1
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