A behavioral explanation of the relative performance evaluation puzzle
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- Discussion papers (FOR) 
We study the effects of competitive preferences, where Chief Executive Officers (CEOs) compare their wage to the wage of other CEOs within the same industry, and derive additional utility from being ahead of them. We show that such concerns work in the direction of CEO wages being positively correlated, in contrast to the Relative Performance Evaluation hypothesis, but consistent with several empirical studies.
PublisherNorwegian School of Economics and Business Administration. Department of Finance and Management Science