The impact of wage increases on job satisfaction is explored theoretically and empirically. To do this, we apply a … utility function that rises with the absolute wage level as well as with wage increases. It is shown that when employees can … influence their wages by exerting effort, myopic utility maximization directly implies increasing and concave shaped wage …

partly by an individual’s absolute wage (say, 30,000 dollars a year) and partly by the individual’s relative wage (say, 30 … economists – predicts that wellbeing is gained partly from the individual’s ranked position of a wage within a comparison set … (say, whether the individual is number 4 or 14 in the wage hierarchy of the company). We report an experimental study and …