Cognitive dissonance and the overtaking anomaly: Psychology in the principal-agent relationship

B-Tier
Journal: Journal of Behavioral and Experimental Economics
Year: 2009
Volume: 38
Issue: 4
Pages: 684-690

Score contribution per author:

2.011 = (α=2.01 / 1 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We propose that the concept of cognitive dissonance contributes to the explanation of the regularity that wages grow faster than productivity. Cognitive dissonance is the tendency of a person to engage in self-justification after a decision. We show that a consequence of this tendency is that agents prefer increasing sequences of surplus over their career. This is achieved by paying wages less than productivity early in the career and more than productivity later. We refer to this as the overtaking anomaly. We distinguish the cognitive dissonance explanation from other explanations of the overtaking anomaly by identifying their divergent implications.

Technical Details

RePEc Handle
repec:eee:soceco:v:38:y:2009:i:4:p:684-690
Journal Field
Experimental
Author Count
1
Added to Database
2026-01-29