Effort and comparison income: experimental and survey evidence

Clark, Andrew E., 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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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
Library of Congress subject classification:	H Social Sciences > HN Social history and conditions. Social problems. Social reform H Social Sciences > HD Industries. Land use. Labor
Journal of Economic Literature Classification System:	J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J33 - Compensation Packages; Payment Methods M - Business Administration and Business Economics; Marketing; Accounting > M5 - Personnel Economics > M54 - Labor Management (team formation, worker empowerment, job design, tasks and authority, work arrangemetns, job satisfaction) C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C92 - Laboratory, Group Behavior A - General Economics and Teaching > A1 - General Economics > A13 - Relation of Economics to Social Values D - Microeconomics > D6 - Welfare Economics > D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
Sets:	Collections > Economists Online Research centres and groups > Centre for Economic Performance (CEP)
Identification Number:	No. 886
Date Deposited:	02 Jul 2010 15:53
URL:	http://eprints.lse.ac.uk/28502/

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