The Power of Positional Concerns

IEW Working Paper No. 368

52 Pages Posted: 8 May 2008

See all articles by Benno Torgler

Benno Torgler

Yale University - Yale Center for International and Area Studies

Sascha L. Schmidt

EBS Universität für Wirtschaft und Recht - Institute for Sports, Business & Society

Bruno S. Frey

CREMA; University of Basel

Abstract

People care a great deal about their relative economic position and not solely about their absolute economic position. However, behavioral evidence is rare. This paper provides evidence on how the relative income position affects professional sports performances. Our analysis suggests that if a player's salary is below the average and this difference increases, his performance worsens. Moreover, the larger the income differences, the stronger positional concern effects are observable. We also find that the more the players are integrated, the more evident a relative income effect is. Finally, we find that positional effects are stronger among high performing teams.

Keywords: relative income, positional concerns, organizational justice, envy, social comparison, relative derivation, equity theory, prospect theory, loss aversion, performance

JEL Classification: D00, D60, 822, 921, L83

Suggested Citation

Torgler, Benno and Schmidt, Sascha L. and Frey, Bruno S., The Power of Positional Concerns. Available at SSRN: https://ssrn.com/abstract=1128056 or http://dx.doi.org/10.2139/ssrn.1128056

Benno Torgler (Contact Author)

Yale University - Yale Center for International and Area Studies ( email )

P.O. Box 208206
New Haven, CT 06520-8206
United States

HOME PAGE: http://www.crema-research.ch/fellowseiten/torgler.htm

Sascha L. Schmidt

EBS Universität für Wirtschaft und Recht - Institute for Sports, Business & Society ( email )

Gustav-Stresemann-Ring 3
65189 Wiesbaden, Hessen 65189
Germany
0611 7102 2064 (Phone)

Bruno S. Frey

CREMA ( email )

Südstrasse 11
Zurich, CH 8008
Switzerland
+41 44 380 00 78 (Phone)

University of Basel ( email )

Peter Merian-Weg 6
Basel, 4002
Switzerland

Register to save articles to
your library

Register

Paper statistics

Downloads
63
rank
341,780
Abstract Views
815
PlumX Metrics