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Effort and Comparison Income: Experimental and Survey Evidence

Andrew Clark, David Masclet () and Marie Claire Villeval

No 2169, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper considers the effect of status or relative income on work effort combining experimental evidence from a gift-exchange game with 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 others’ average income, suggesting that comparisons are more ordinal than cardinal. We then show that effort is also affected by comparisons over time: those who received higher income offers or had higher income rank in the past exert lower levels of effort for a given current income and rank.

Keywords: comparison income; peak-end; experiments; rank; effort (search for similar items in EconPapers)
JEL-codes: A13 C92 D63 J33 M54 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2006-06
New Economics Papers: this item is included in nep-bec, nep-cbe and nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19) Track citations by RSS feed

Published - revised version published in: Industrial and Labor Relations Review, 2010, 63 (3), 407-426.

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https://docs.iza.org/dp2169.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 (2010) Downloads
Working Paper: Effort and Comparison Income: Experimental and Survey Evidence (2008) Downloads
Working Paper: Effort and comparison income: experimental and survey evidence (2008) Downloads
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