Status and incentives |
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Authors: | Emmanuelle Auriol Régis Renault |
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Affiliation: | 1. Toulouse School of Economics, Université des Sciences Sociales de Toulouse, and Institut Universitaire de France;2. eauriol@cict.fr.;3. Université de Cergy‐Pontoise, ThEMA, and Institut Universitaire de France;4. regis.renault@u‐cergy.fr. |
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Abstract: | This article introduces status as reflecting an agent's claim to recognition in her work. This is a scarce resource: increasing an agent's status requires that another agent's status be decreased. Higher‐status agents are more willing to exert effort in exchange for money; better‐paid agents would exert higher effort in exchange for improved status. The results are consistent with actual management practices: (i) egalitarianism is desirable in a static context; (ii) in a long‐term work relationship, juniors' compensation is delayed; and (iii) past performance is rewarded by pay increases along with improved status within the organization's hierarchy. |
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