Title

Games with Money and Status: How Best to Incentivize Work

Document Type

Discussion Paper

Publication Date

7-1-2014

CFDP Number

1954

CFDP Pages

46

Abstract

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.

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