We analyze the impact of social comparison on optimal contract design under imperfect labor market competition for managerial talent. Adding a disutility of social comparison as induced by a ranking of verifiable efforts to the multi-task model by Bénabou and Tirole (2016), we demonstrate that...

This paper studies whether test score-based performance pay for public-school principals affects principals’ labor market decisions. I leverage the introduction of a principal performance pay system in North Carolina in July 2017. The new compensation system removed experience and education as...