Awards: A View from Psychological Economics

Abstract

Awards in the form of orders, decorations, prizes, and titles are ubiquitous in monarchies and republics, private organizations, not-for-profit, and profit-oriented firms. This paper argues that awards present a unique combination of different stimuli and that they are distinct and unlike other monetary and non-monetary rewards. Despite their relevance in all areas of life awards have not received much scientific attention. We propose to study awards and present results on a vignette experiment that quantifies and isolates the effects of different award characteristics such as the publicity associated with winning an award. Further, employing a unique data set, we demonstrate that there are substantial differences in the intensity of usage of awards across countries. Introduction Awards all overIf an alien were to look at the social life of people here on earth, it would be stunned by the enormous number of awards in the form of orders, medals, decorations, prizes, titles and other honors. It would be hard pressed to find any area of society in which awards are not used. Awards are equally ubiquitous in monarchies as in staunch republics. In the French Republic, for instance, the légion d'honneur plays an important role, and 3'000 such awards are conferred annually (House of Commons 2004). In the United States, the President and Congress bestow medals, while at the same time purple hearts, bronze and silver stars are handed out quite liberally, and at an increasing rate in the military service (Cowen 2000: 93). It is well known that a flood of orders, medals and titles (such as "Hero of the Soviet Union" or "Hero of Socialist Labour") was handed out in communist countries, such as the Soviet Union or the German Democratic Republic, and that this behavior it is typical for both rightand left-wing dictatorships.Awards exist not only at the national level. In the arts, culture and the media, awards are also of central importance. A few prominent examples are the Academy Awards (Oscars), the prizes handed out by the film festivals at Cannes, Venice or Berlin, the (1'200 persons), and "Young Global Leaders" (1'111 persons below 40 years of age).It would be a mistake to attribute this trend simply to "Americanism". In Britain, for instance, the leaders of many large corporations are decorated with orders and titles. 6Or take the Dalai Lama who has received a myriad of awards and honors among them the Nobel Peace Prize, two honorary doctorates, the honorary citizenship of the Ukraine, and the United States Congressional Gold Medal. LiteratureThe science of phaleristics (the Greek and Roman word for award) has produced a large literature on specific awards, in particular on orders, decorations and medals. Despite the importance of awards in society, economists have largely disregarded them. 8 However, there is some literature in economics that provides insights into isolated aspects of awards. A typical way for (standard) economists to look at awards would be in terms of the signal emitted (see Spence 197...

Where Are They Now? Winners of a Library Prize for Undergraduate Research: A Survey at the University of California, Berkeley

“…By creating and establishing role models, they communicate information about successful and desirable behaviors. For nonwinners, however, there is the potential for disappointment and even decreased performance effort (Frey & Neckermann, 2008).…”

“…One possible explanation for this high response rate, we speculated, was loyalty and goodwill engendered from having won the prize. This speculation is supported by Frey and Neckerman who described awards as, among other things, inducing loyalty to the award-granting organizations (Frey & Neckermann, 2008). To get more detailed information, the initial survey asked respondents whether they would be willing to be contacted with follow-up questions.…”

Behavioral political economy: A survey

“…Galasso and Nannicini (2015) discuss the efficacy of formal electoral systems in performing the task of selecting skilled politicians. But beyond political systems, there is also evidence that tentatively points into the direction that positive incentives are useful in selecting good politicians, where positive incentives do not necessarily need to be monetary, but can also be of a pure reputational value, such as awards (Frey & Neckermann 2008). However, a constitution that disregards knavish behavior is still not preferable: Minorities, who are not part of the winning coalition, need protection from an agent whose objectives are closely aligned with those of the winning coalition.…”

“…Charness et al (2013 offer experimental evidence suggesting that if individuals in an organization receive information on relative performance, but are paid flat wages, they will invest in destructive effort and sabotage their internal competitors' work. Thus, even non-monetary incentives may have adverse effects in bureaucratic organizations, which may also pose a problem to using awards as incentives, as proposed by Frey & Neckermann (2008). In general, the empirical literature on the effects of performance-related rewards in bureaucracies is still inconclusive (Hasnain et al 2012), and a golden rule for proper incentives for bureaucrats is not available at this point.…”

Environmental Policy Theory Given Bounded Rationality and Other-regarding Preferences

“…Concrete channels to implement them are public disclosure and awards or prizes. For example, Frey and Neckermann (2008) have studied social awards in the form of public recognition as a mechanism to improve cooperation in a work place setting. They point out that the main difference with monetary compensation is that awards stimulate social recognition and social reinforcement and so are less likely to crowd out intrinsic motivations.…”