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)
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: M54 J33 A13 C92 D63 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-cbe and nep-exp
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Journal Article: Effort and Comparison Income: Experimental and Survey Evidence (2010)
Working Paper: Effort and comparison income: experimental and survey evidence (2010)
Working Paper: Effort and Comparison Income: Experimental and Survey Evidence (2008)
Working Paper: Effort and comparison income: experimental and survey evidence (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp2169
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