Knight Fever - Towards an Economics of Awards

43 Pages Posted: 9 May 2005

Date Written: May 2005


Awards in the form of orders, medals, decorations and titles are ubiquitous in monarchies and republics, private organizations, not-for-profit and profit-oriented firms. Nevertheless, economists have disregarded this kind of non-material extrinsic incentive. The demand for awards relies on an individual's desire for distinction, and the supply of awards on the provision of incentives. Relative price and income effects are shown to be identifiable and strong. A number of empirically testable propositions are formulated. As awards are (at least so far) impossible to measure adequately, empirical tests are carried out using the technique of analytic narratives.

Keywords: Incentives, motivation, awards, orders, distinction, principal-agent

JEL Classification: D23, D73, J22, J33, L22, Z13

Suggested Citation

Frey, Bruno S., Knight Fever - Towards an Economics of Awards (May 2005). CESifo Working Paper No. 1468; IEW Working Paper No. 239. Available at SSRN:

Bruno S. Frey (Contact Author)

CREMA ( email )

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

University of Basel ( email )

Peter Merian-Weg 6
Basel, 4002

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