Department of Buisness and Economics
University of Southern Denmark
5230 Odense M, Denmark
Information about this author at RePEc
NBER Working Papers and Publications
|December 2016||Killer Incentives: Status Competition and Pilot Performance during World War II|
with Leonardo Bursztyn, Hans-Joachim Voth: w22992
A growing theoretical and empirical literature shows that public recognition can lead employees to exert greater effort. However, status competition is also associated with excessive expenditure on status goods, greater likelihood of bankruptcy, and more risk taking by money managers. This paper examines the effects of recognition and status competition jointly. In particular, we focus on the spillover effects of public recognition on the performance and risk taking of peers. Using newly collected data on monthly “victory” scores of more than 5,000 German pilots during World War II, we find that status competition had important effects: After the German armed forces bulletin mentioned the accomplishments of a particular fighter pilot, his former peers performed considerably better. This ou...