The Power of Positional Concerns: A Panel Analysis

Benno Torgler, Sascha Schmidt () and Bruno Frey

No 11, NCER Working Paper Series from National Centre for Econometric Research

Abstract: Many studies have established that people care a great deal about their relative economic position and not solely, as standard economic theory assumes, about their absolute economic position. However, behavioral evidence is rare. This paper provides an empirical analysis on how individuals' relative income position affects their performance. Using a unique data set for 1040 soccer players over a period of eight seasons, our analysis suggests that if a player's salary is below the average and this difference increases, his performance worsens and the productivity decreasing effects of positional concerns are stronger. Moreover, the larger the income differences within a team, the stronger positional concern effects are observable. We also find that the more the players are integrated in a particular social environment (their team), the more evident a relative income effect is. Finally, we find that positional effects are stronger among high performing teams.

Keywords: Relative income; positional concerns; envy; performance; social integration (search for similar items in EconPapers)
Date: 2007-02-27
New Economics Papers: this item is included in nep-ltv
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Citations: View citations in EconPapers (7)

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Related works:
Working Paper: The Power of Positional Concerns: A Panel Analysis (2006)
Working Paper: The Power of Positional Concerns: A Panel Analysis (2006)
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