Killer Incentives: Status Competition and Pilot Performance During World War II

46 Pages Posted: 9 Jan 2017

See all articles by Philipp Ager

Philipp Ager

University of Southern Denmark - Department of Business and Economics; Centre for Economic Policy Research (CEPR)

Leonardo Bursztyn

University of California, Los Angeles (UCLA) - Anderson School of Management

Hans-Joachim Voth

University of Zurich - UBS International Center of Economics in Society; Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 3 versions of this paper

Date Written: January 2017

Abstract

A growing theoretical and empirical literature shows that public recognition can lead to greater effort amongst employees. At the same time, status competition can be associated with excessive expenditure on status goods, higher risk of bankruptcy, and more risk taking amongst money managers. In this paper, we look at the effects of recognition and status competition jointly: We focus on the spillover effects of public recognition on the performance and risk taking of peers. Using newly collected data on monthly victory scores of over 5,000 German pilots during World War II, we find corrosive effects of status competition: When the daily bulletin of the German armed forces mentioned the accomplishments of a particular fighter pilot, his former peers perform markedly better. Outperformance is differential across skill groups. When a former squadron peer is mentioned, the best pilots try harder, score more, and die no more frequently; average pilots win only a few additional victories, but die at a markedly higher rate. Our results suggest that the overall efficiency effects of non-financial rewards can be ambiguous in settings where both risk and output affect aggregate performance.

Keywords: Behavioral economics, Employee motivation, Nonfinancial incentives, Status competition, World War II

JEL Classification: J24, J32, M52, N44

Suggested Citation

Ager, Philipp and Bursztyn, Leonardo and Voth, Hans-Joachim, Killer Incentives: Status Competition and Pilot Performance During World War II (January 2017). CEPR Discussion Paper No. DP11751. Available at SSRN: https://ssrn.com/abstract=2896041

Philipp Ager (Contact Author)

University of Southern Denmark - Department of Business and Economics ( email )

DK-5230 Odense
Denmark

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Leonardo Bursztyn

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

Hans-Joachim Voth

University of Zurich - UBS International Center of Economics in Society ( email )

Raemistrasse 71
Zuerich, 8006
Switzerland

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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