Envy Manipulation at Work
In: The B.E. journal of theoretical economics, Band 21, Heft 1, S. 287-314
Abstract
Abstract
We present a simple principal-agent model with an employer and two types of employees/workers, low and high skilled. Low-skilled workers are envious of their high-skilled peers, and incur a disutility cost whenever the latter receive a positive surplus from their labor contract. We show that: i) if the envy cost is relatively low (high), high-skilled workers obtain a payoff higher (lower) than that they receive when they are not envied; ii) if the envy cost can be manipulated (increased or reduced), high-skilled workers can take actions of envy-provocation or envy-reduction to further increase their payoff.
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