Summary of Money and Status

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Money and Status summary
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Rating

7 Overall

6 Applicability

7 Innovation

7 Style

Recommendation

Any employer would be happy to have a formula on how to get the most work out of employees while paying them as little as possible. In this detailed report, professors Pradeep Dubey and John Geanakoplos use game theory to develop mathematical tools for this purpose. Among their findings is that employers should spur workers on with title incentives: Organizational status designations are one way to supplement wages, and they work well for many people. While the authors’ approach might work on paper, it could prove difficult to use in practice. The study’s abstruse mathematical modeling overlooks the human behavioral aspects that suggest people are not always as rational as economics would propose. Still, this research provides an intriguing perspective on a prickly workplace issue. getAbstract recommends it to entrepreneurs, human resources executives and business managers.

In this summary, you will learn

  • How businesses can use both status and monetary incentives to increase productivity while keeping wage costs down, and
  • What combinations of status and financial incentives lead to “optimal wage-title” formulas.
 

About the Authors

Pradeep Dubey is an economics professor at the State University of New York, Stony Brook. John Geanakoplos is an economics professor at Yale University.

 

Summary

The desire for status – a person’s “relative rank” in society – drives human behavior. For example, athletes vie for medals and triumph, students work for grades and approval, and business executives strive for promotions and prestige. People crave recognition in some form or another, including in the...

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