Author ' s personal copy Rank as an inherent incentive : Evidence from a fi eld experiment ☆

a r t i c l e i n f o Money is the prime incentive considered in economic models. However, recent evidence indicates that people are also greatly concerned about their social rankings. Is this solely because rank brings tangible benefits, or because in addition people have an inherent preference for high rank? This paper deployed a field experiment that provides evidence for an inherent preference. In the experiment, Vietnamese students enrolled in an English course performed significantly better on the official standardized international final test when they were told their rankings on practice tests than when they were not. This result held even when this ranking information could not be reliably communicated, thus severely attenuating the potential to bring tangible or status benefits. Economists have long noted the merits of competition. When competition reigns, participants usually care more about their rank than their absolute performance, because it is rank that determines the winners and losers. Rank also lies at the core of tournament outcomes , which motivate a broad array of real world phenomena, such as winning a job. People often desire high rank because it brings tangible benefits, such as income, protection, necessities, and conveniences. In his Theory of Moral Sentiments, Adam Smith identified a more fundamental desire for rank: " Though it is in order to supply the necessities and conveniences of the body, that the advantages of external fortune are originally recommended to us, yet we cannot live long in the world without perceiving that the respect of our equals, our credit and rank in the society we live in, depend very much upon the degree in which we possess, or are supposed to possess, those advantages. The desire of becoming the proper objects of this respect, of deserving and obtaining this credit and rank among our equals, is, perhaps, the strongest of all our desires, and our anxiety to obtain the advantages of fortune is accordingly much more excited and irritated by this desire, than by that of supplying all the necessities and conveniences of the body, which are always very easily supplied. " Later economists amplified the view that the desire for rank in wealth or status by itself is a major motivator. 1 Recently, economic modeling has been extended to account for status goods, relative positions , and the rank incentive. 2 It has been proposed that the rank incentive might have …