"Status Incentives" by Tim Besley and Maitreesh Ghatak will be published in the American Economic Review, Papers and Proceedings, in May 2008.
Abstract: When economists study incentives in organizations, the main focus has been on using monetary payments in exchange for performance on specific measurable dimensions. But organizations use a wide variety of means to motivate their workers. One such method which has not been studied much to date, is the explicit creation of status rewards attached to good performance. In this paper, the authors consider the role of such status awards as an incentive device.