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Inequity Aversion in Tournaments

Dominique Demougin () and Claude Fluet ()

Cahiers de recherche from CIRPEE

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, by 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.

Keywords: Tournaments; Inequity aversion; Envy; Incentives; Performance (search for similar items in EconPapers)
JEL-codes: D8 J4 (search for similar items in EconPapers)
Date: 2003
New Economics Papers: this item is included in nep-mic
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