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Effort and comparison income: experimental and survey evidence

Clark, Andrew E. and Masclet, David and Villeval, Marie-Claire (2008) Effort and comparison income: experimental and survey evidence. CEP Discussion Paper, No. 886. Centre for Economic Performance, London School of Economics and Political Science, London, UK. ISBN 9780853282938

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Identification Number: No. 886

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.

Item Type: Monograph (Discussion Paper)
Official URL: http://cep.lse.ac.uk/
Additional Information: © 2008 The authors
Subjects: H Social Sciences > HN Social history and conditions. Social problems. Social reform
H Social Sciences > HD Industries. Land use. Labor
Sets: Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Series: Working Papers > CEP Discussion Papers
Date Deposited: 02 Jul 2010 15:53
Last Modified: 09 Aug 2013 09:14
URI: http://eprints.lse.ac.uk/id/eprint/28502

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