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Social and Behavioral Sciences Commons™
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Articles 1 - 9 of 9
Full-Text Articles in Social and Behavioral Sciences
Money And Status: How Best To Incentivize Work, Pradeep Dubey, John Geanakoplos
Money And Status: How Best To Incentivize Work, Pradeep Dubey, John Geanakoplos
Cowles Foundation Discussion Papers
Status is greatly valued in the real world, yet it has not received much attention from economic theorists. We examine how the owner of a firm can best combine money and status to get her employees to work hard for the least total cost. We find that she should motivate workers of low skill mostly by status and high skill mostly by money. Moreover, she should do so by using a small number of titles and wage levels. This often results in star wages to the elite performers. By analogy, the governance of a society should pay special attention to …
Games With Money And Status: How Best To Incentivize Work, Pradeep Dubey, John Geanakoplos
Games With Money And Status: How Best To Incentivize Work, Pradeep Dubey, John Geanakoplos
Cowles Foundation Discussion Papers
Status is greatly valued in the real world, yet it has not received much attention from economic theorists. We examine how the owner of a firm can best combine money and status together to get his employees to work hard for the least total cost. We find that he should motivate workers of low skill mostly by status and high skill mostly by money. Moreover, he should do so by using a small number of titles and wage levels. This often results in star wages to the elite performers.
Money And Status: How Best To Incentivize Work, Pradeep Dubey, John Geanakoplos
Money And Status: How Best To Incentivize Work, Pradeep Dubey, John Geanakoplos
Cowles Foundation Discussion Papers
Status is greatly valued in the real world, yet it has not received much attention from economic theorists. We examine how the owner of a firm can best combine money and status to get her employees to work hard for the least total cost. We find that she should motivate workers of low skill mostly by status and high skill mostly by money. Moreover, she should do so by using a small number of titles and wage levels. This often results in star wages to the elite performers and, more generally, in wage jumps for small increases in productivity. By …
Prizes Versus Wages With Envy And Pride, Pradeep Dubey, John Geanakoplos, Ori Haimanko
Prizes Versus Wages With Envy And Pride, Pradeep Dubey, John Geanakoplos, Ori Haimanko
Cowles Foundation Discussion Papers
We show that if agents are risk neutral, prizes outperform wages if and only if there is sufficient pride and envy relative to the noisiness of performance. If agents are risk averse, prizes are a necessary supplement to wages (as bonuses).
Assortative Matching And Repubation, Axel Anderson, Lones Smith
Assortative Matching And Repubation, Axel Anderson, Lones Smith
Cowles Foundation Discussion Papers
Consider Becker’s classic 1963 matching model, with unobserved fixed types and stochastic publicly observed output. If types are complementary, then matching is assortative in the known Bayesian posteriors (the ‘reputations’). We discover a robust failure of Becker’s result in the simplest dynamic two type version of this world. Assortative matching is generally neither efficient nor an equilibrium for high discount factors. In a labor theoretic rationale, we show that assortative matching fails around the highest (lowest) reputation agents for ‘low-skill (high-skill) concealing’ technologies. We then find that as the number of production outcomes grows, almost all technologies are of either …
Grading In Games Of Status: Marking Exams And Setting Wages, Pradeep Dubey, John Geanakoplos
Grading In Games Of Status: Marking Exams And Setting Wages, Pradeep Dubey, John Geanakoplos
Cowles Foundation Discussion Papers
We introduce grading into games of status. Each player chooses effort, producing a stochastic output or score. Utilities depend on the ranking of all the scores. By clustering scores into grades, the ranking is coarsened, and the incentives to work are changed. We first apply games of status to grading exams. Our main conclusion is that if students care primarily about their status (relative rank) in class, they are often best motivated to work not by revealing their exact numerical exam scores (100,99,…,1), but instead by clumping them into coarse categories ( A,B,C ). When student abilities are disparate, the …
Grading In Games Of Status: Marking Exams And Setting Wages, Pradeep Dubey, John Geanakoplos
Grading In Games Of Status: Marking Exams And Setting Wages, Pradeep Dubey, John Geanakoplos
Cowles Foundation Discussion Papers
We introduce grading into games of status. Each player chooses effort, producing a stochastic output or score. Utilities depend on the ranking of all the scores. By clustering scores into grades, the ranking is coarsened, and the incentives to work are changed. We first apply games of status to grading exams. Our main conclusion is that if students care primarily about their status (relative rank) in class, they are often best motivated to work not by revealing their exact numerical exam scores (100,99,…,1), but instead by clumping them into coarse categories ( A,B,C ). When student abilities are disparate, the …
Prizes Versus Wages With Envy And Pride, Pradeep Dubey, John Geanakoplos, Ori Haimanko
Prizes Versus Wages With Envy And Pride, Pradeep Dubey, John Geanakoplos, Ori Haimanko
Cowles Foundation Discussion Papers
We show that if agents are risk neutral, prizes outperform wages when there is sufficient pride and envy relative to the noisiness of performance. If agents are risk averse, prizes are a necessary supplement to wages (as bonuses).
Grading Exams: 100, 99, ..., 1 Or A, B, C? Incentives In Games Of Status, Pradeep Dubey, John Geanakoplos
Grading Exams: 100, 99, ..., 1 Or A, B, C? Incentives In Games Of Status, Pradeep Dubey, John Geanakoplos
Cowles Foundation Discussion Papers
We show that if students care primarily about their status (relative rank) in class, they are best motivated to work not by revealing their exact numerical exam scores (100,99,…,1), but instead by clumping them in broad categories (A,B,C). If their abilities are disparate, the optimal grading scheme awards fewer A’s than there are alpha-quality students, creating small elites. If their abilities are common knowledge, then it is better to grade them on an absolute scale (100 to 90 is an A, etc.) rather than on a curve (top 15% is an A, etc.). We develop criteria for optimal grading schemes …