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Information about relative performance: analysis of motivation and happiness
8th National Competition for Economic Research Grants
Labour economics
Senior Researcher : Nagore Iriberri Etxebeste
Research Centre or Institution : Departamento de Economía y Empresa. Universidad Pompeu Fabra. Barcelona
Abstract
The project proposes to study the effects of the provision of information about relative performance on both the performance levels and satisfaction of the individuals concerned. In the Labour Economy, a basic supposition is that the economic agents respond only to economic incentives. If a contract offers remuneration for work done (piece-rate incentives), the economic agents will select the optimum effort by making the value of the marginal productivity equal the marginal cost of the effort. If economic agents are provided with information about their relative performance, i.e. if they can compare their individual performance with the performance of other economic agents, this information should not have any effect on their decision regarding the effort. However, there is empirical evidence this is not true. Individuals have been found to perform better when they receive this information and their satisfaction is also affected.
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