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The Economists’ Voice

Ed. by Belke, Ansgar / Schnabl, Gunther

CiteScore 2017: 0.15

SCImago Journal Rank (SJR) 2017: 0.104
Source Normalized Impact per Paper (SNIP) 2017: 0.105

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Volume 11, Issue 1


The Power of Awards

Bruno S. Frey / Jana Gallus
Published Online: 2014-06-07 | DOI: https://doi.org/10.1515/ev-2014-0002


Every economist worth his or her salt will tell you that monetary compensation is more efficient than all other forms of rewards. Awards have only received scant attention in the economics literature. Yet, they are ubiquitous. They can take many forms and include titles, prizes, orders, medals, and still other types of decorations. We outline the distinguishing characteristics of awards, especially in comparison to monetary rewards, show the potential risks and emphasize where awards are particularly useful.

Keywords: awards; incentives; intrinsic motivation; money; performance pay

References and Further Reading

  • Barro, Robert J., Rachel M. McCleary, and Alexander McQuoid. 2010. “Economics of Sainthood (a preliminary investigation).” Available online: www.economics.harvard.edu/faculty/barro/files/Saints/%2Bpaper/%2B020910.pdf.

  • Besley, Timothy. 2005. Notes on Honours. Mimeo: London School of Economics.Google Scholar

  • Chan, Ho F., Bruno S. Frey, Jana Gallus, and Benno Torgler. 2014. “Academic Honors and Performance.” Labour Economics, Forthcoming.Google Scholar

  • Frey, Bruno S., and Jana Gallus. 2014. “Awards are a Special Kind of Signal.” CREMA Working Paper Number 2014–04.Google Scholar

  • Hansen, W. Lee, and Burton A. Weisbrod. 1972. “Toward a General Theory of Awards, or, do Economists Need a Hall of Fame?” Journal of Political Economy March–April, 422–431.Google Scholar

  • Holmström, Bengt, and Paul Milgrom. 1991. “Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design.” Journal of Law, Economics, and Organization, January, 24–52.Google Scholar

  • Osterloh, Margit, and Bruno S. Frey. 2000. “Motivation, Knowledge Transfer, and Organizational Forms.” Organization Science, September–October, 538–550.Google Scholar

About the article

Corresponding author: Bruno S. Frey, Department of Economics, University of Zurich, Hottingerstrasse 10, 8032 Zurich, Switzerland, Tel.: +41-44-634-37-30, e-mail:

aBruno S. Frey was Professor of Economics at the University of Zurich and Distinguished Professor of Behavioral Science at the University of Warwick. He is now Professor of Economics at Zeppelin University and Research Director of CREMA. His research interests include the economics of awards, the economics of happiness, and cultural economics.

bJana Gallus is a Doctoral Student and Lecturer at the University of Zurich, Switzerland. In her research she theoretically and empirically analyzes incentives and motivation.

Published Online: 2014-06-07

Published in Print: 2014-11-01

Citation Information: The Economists' Voice, Volume 11, Issue 1, Pages 1–5, ISSN (Online) 1553-3832, ISSN (Print) 2194-6167, DOI: https://doi.org/10.1515/ev-2014-0002.

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