1. ¹Institute for Empirical Research in Economics, University of Zurich, Zurich, Switzerland
2. ²CREMA – Center for Research in Economics, Management and the Arts, Zurich, Switzerland

Correspondence: Bruno S. Frey, Institute for Empirical Research in Economics, University of Zurich, Winterthurerstrasse 30, 35 99, CH-8006, Zurich CH-8006, Switzerland. Tel: +41 44 634 37 31; Fax: +41 44 634 35 99; E-mail: bsfrey@iew.unizh.ch

Abstract

Awards are non-material, extrinsic compensation taking the form of orders, medals, decorations and prizes. They have been widely used in monarchies and republics, private organizations, not-for-profit and profit-oriented firms. Nevertheless, they have so far not received much attention. This paper develops empirically testable hypotheses, analysing the determinants of the supply of awards. The hypotheses refer to the possibility of using awards, the effectiveness of awards, and the capacity to maintain the scarcity value of awards. As the number of awards bestowed cannot (at least so far) be measured adequately, empirical evidence is adduced by way of illustrative examples.