Location of Repository

Games of status and discriminatory contracts

By Amrita Dhillon and Alexander Hertzog-Stein

Abstract

Following recent empirical evidence which indicates the importance of rank for the determination of workers’ wellbeing, this paper introduces status seeking preferences in the form of rank-dependent utility functions into a moral hazard framework with one firm and multiple workers, but no correlation in production. Workers’ concern for the rank of their wage in the firm’s wage distribution may induce the firm to offer discriminatory wage contracts when its aim is to induce all workers to expend effort

Topics: HM
Publisher: University of Warwick, Department of Economics
Year: 2006
OAI identifier: oai:wrap.warwick.ac.uk:1439

Suggested articles

Preview


To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.