Dubey, Pradeep; Geanakoplos, John; Haimanko, Ori - Economics Department, Ben Gurion University of the Negev - 2011
We show that if agents are risk neutral, prizes outperform wages if and only if there is sufficient pride and envy … relative to the noisiness of performance. If agents are risk averse, prizes are a necessary supplement to wages (as bonuses). …