Susanne Neckermann, Reto Cueni, Bruno S. Frey. Awards at work

Awards widespread in the corporate sector and elsewhere are motivators that derive their value from non-pecuniary concerns such as status and self-image. Quasi-experimental panel data from the call center of a large international bank allow us to estimate the causal impact on effort when receiving an award. The performance of winners proves to be significantly higher than that of comparable nonrecipients after the award has been presented. This increase in work effort is sizeable and robust. We ...

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Bruno S. Frey. Tullock Challenges: Happiness, Revolutions and Democracy

Gordon Tullock has been one of the most important founders and contributors to Public Choice. Two innovations are typical. Tullock Challenges. The first relates to method: the measurement of subjective well-being, or happiness. The second relates to digital social networks such as Facebook, Twitter, or to some extent Google. Both innovations lead to strong incentives by the governments to manipulate the policy consequences. In general What is important, will be manipulated by the government. To ...

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Bruno S. Frey, Susanne Neckermann. Awards as Signals

Awards are widespread in all countries and are prevalent both in the public sphere and in the private sector. This paper argues, and empirically supports, that awards serve public functions and economists should take them seriously. Using a unique cross-country data set, we suggest that awards serve as signals. Awards are more prevalent the more difficult the position and status of an individual is to observe due to an anonymous and globalized setting.

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Rainer Winkelmann. Conspicuous consumption and satisfaction

Traditional tools of welfare economics identify the envy-related welfare loss from conspicuous consumption only under very strong assumptions. Measured income and life satisfaction offers an alternative for estimating such consumption externalities. The approach is developed in the context of luxury car consumption (Ferraris and Porsches) in Switzerland. Results from household panel data and fixed effects panel regressions suggest that the prevalence of luxury cars in the municipality of residenc...

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Lasse Steiner, Bruno S. Frey, Simone Hotz. European capitals of culture and life satisfaction

This paper analyzes whether hosting the most prestigious European cultural event, the European Capital of Culture, has an impact on regional economic development or the life satisfaction of the local population. Concerning the economic impact, we show that European Capitals are hosted in regions with above average GDP per capita, but do not causally affect the economic development in a significant way. Even a positive impact on GDP per capita would not imply a positive impact on individual utili...

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Elizabeth W. Dunn, Timothy D. Wilson, Daniel T. Gilbert. Location, Location, Location: The Misprediction of Satisfaction in Housing Lotteries

People tend to overestimate the emotional consequences of future life events, exhibiting an impact bias. The authors replicated the impact bias in a real-life context in which undergraduates were randomly assigned to dormitories (or “houses”). Participants appeared to focus on the wrong factors when imagining their future happiness in the houses. They placed far greater weight on highly variable physical features than on less variable social features...

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