Status Incentives

When economists study incentives in organizations,the main focus has been on using monetary paymentsin exchange for performance on specific measurabledimensions. But organizations use a wide varietyof means to motivate their workers. One suchmethod which has not been studied much to date, isthe explicit creation of status rewards attached to goodperformance.1 Under such schemes, an agent is givena positional good " such as a job title or a medal "whose value comes from its scarcity. Some organizations,such as the military, make extensive useof medals as status rewards rather making cash payments.Academia too is awash with job titles, fellowshipsand prizes whose value is mostly symbolic butwhich convey status on their recipients.[...]