Are people willing to sacrifice resources to save one's and others' face? In a laboratory experiment, we study whether individuals forego resources to avoid the public exposure of the least performer in their group. We show that a majority of individuals are willing to pay to preserve not only...

Variable pay not only creates a link between pay and performance but may also help firms in attracting the more productive employees (Lazear 1986, 2000). However, due to lack of natural data, empirical analyses of the relative importance of the selection and incentive effects of pay schemes are...

We estimate the effect of introducing new workplace practices on the gender gap in wages in the manufacturing sector. We use a unique 1999 survey on work and compensation practices of Danish private sector firms merged to a large matched employer-employee database. Self-managed teams, project...

When exogenously imposed, rank-order tournaments have incentive properties but their overall efficiency is reduced by a high variance in performance (Bull, Schotter, and Weigelt 1987). However, since the efficiency of performance-related pay is attributable both to its incentive effect and to...

This paper experimentally investigates the impact of different pay and relative performance information policies on employee effort. We explore three information policies: No feedback about relative performance, feedback given halfway through the production period, and continuously updated...

This paper examines the role of unobserved ability in explaining inter-industry wage differentials, drawing on data on brothers. Such data allow us to account for unmeasured abilities due to common family and community factors shared by siblings. Important advantages of this approach are that we...

The correlation in economic status among siblings is a useful ?omnibus measure? of the overall impact of family and community factors on adult economic status. In this study we compare brother correlations in long-run (permanent) earnings between the United States, on one hand, and the Nordic...

Assuming that people care not only about what others do but also on what others think, we study respect as a non-monetary source of motivation in a context where the length of the employment relationship is endogeneous. In our three-stage gift-exchange experiment, the employer can express...

The dearth of women in top managerial positions is characterized by a high persistence and insensitivity to changes and differences in institutions and policies. This suggests it could be caused by slowly changing social norms and attitudes in the labor market, such as gender stereotypes and...

The two key predictions of hedonic wage theory are that there is a trade-off between wages and nonmonetary rewards and that the latter can be used as a sorting device by firms to attract and retain the kind of employees they desire. Empirical analysis of these topics are scarce as they require...