A worker's utility may increase in his own income, but envy can make his utility decline with his employer's income … various assumptions about the object and generality of envy. Envy amplifies the effect of incentives on effort and, therefore …, increases optimal incentive pay. Moreover, envy can make profitsharing optimal, even when the worker's effort is fully …

We take into account that envy (relative consumption concerns) is more pronounced in the present than in the future. We … exogenous parameters. Agents' preferences exhibit present-biased envy: agents are naive and care about how their consumption … levels compare to that of others in the current period. Our results suggest that present-biased envy affects both the level …