Does Physical Exercise Affect Tradeoffs between Fixed Pay and Performance-related Pay for Individuals?


Much of the literature on performance-related pay has discussed the relationships with risk attitude, job satisfaction, sorting effects, amongst other factors. This paper focuses on the relationship between individual preferences for physical exercise or sports and the tradeoff between fixed and performance-related pay. First, a choice experiment is used to identify the individual preference for payments, and the tradeoff between fixed and performance-related pay. Next, OLS regression models are used to link the tradeoff with individual preference for physical exercise or sports. The results show that such a preference has a positive and significant influence on individuals' tradeoff of payments. For individuals who like physical exercise or sports more, who are better at them, and who take part in them more frequently, are more likely to prefer performance-related pay.


Physical exercise, Sports, Fixed pay, Performance-related pay, Tradeoff

JEL Classification

C35, J33, Z22


Graduate School of Economics, Kobe University

Faculty of International Studies, Hiroshima City University

Junyi SHEN
Research Institute for Economics and Business Administration,
Kobe University
Rokkodai-cho, Nada-ku, Kobe
657-8501 Japan
Phone: +81-78-803-7036
FAX: +81-78-803-7059
School of Economics, Shanghai University, China