Games with Money and Status: How Best to Incentivize Work

47 Pages Posted: 16 Jul 2014

See all articles by Pradeep K. Dubey

Pradeep K. Dubey

SUNY Stony Brook - Center for Game Theory in Economics

John Geanakoplos

Yale University; Santa Fe Institute

Date Written: July 14, 2014

Abstract

Status is greatly valued in the real world, yet it has not received much attention from economic theorists. We examine how the owner of a firm can best combine money and status together to get his employees to work hard for the least total cost. We find that he should motivate workers of low skill mostly by status and high skill mostly by money. Moreover, he should do so by using a small number of titles and wage levels. This often results in star wages to the elite performers.

Keywords: Status, Incentives, Wages

JEL Classification: C70, I20, I30, I33

Suggested Citation

Dubey, Pradeep K. and Geanakoplos, John D, Games with Money and Status: How Best to Incentivize Work (July 14, 2014). Cowles Foundation Discussion Paper No. 1954, Available at SSRN: https://ssrn.com/abstract=2465966 or http://dx.doi.org/10.2139/ssrn.2465966

Pradeep K. Dubey

SUNY Stony Brook - Center for Game Theory in Economics ( email )

Stony Brook, NY 11794
United States
631-632-7555 (Phone)
631-632-7516 (Fax)

John D Geanakoplos (Contact Author)

Yale University ( email )

30 Hillhouse Avenue
New Haven, CT 06511
United States
203-432-3397 (Phone)

HOME PAGE: http://https://economics.yale.edu/people/faculty/john-geanakoplos

Santa Fe Institute ( email )

1399 Hyde Park Road
Santa Fe, NM 87501
United States

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