Column: Patt Morrison asks: UCLA economist Jana Gallus on the value of intrinsically valueless baubles like the Oscar

A few of the world’s truly great honors and awards are accompanied by truly great checks. The Nobel Prize, for one, comes with something close to a million dollars. The Oscars, though, which are handed out Sunday, are merely coated in gold.

Since the mid-20th century, winners can only sell them to the Motion Picture Academy, for one buck. Yet no calculable price can be set on the publicity, job prospects, and the phrase “Oscar winner” that’s ever after attached to the awardees’ names.

Economist Jana Gallus, at the UCLA Anderson School, works to figure out what our cherished but intrinsically valueless little baubles are really worth to the human spirit.

CLICK HERE TO LISTEN TO THIS INTERVIEW ON THE ‘PATT MORRISON ASKS’ PODCAST »

The Oscars are coming up, and it only takes a minute to think of other prizes: the Nobel Prize, the Pritzker, the MacArthur, the Man Booker, the Fields medal. Why do we do this?

There are a number of reasons why people hand out awards. One of them, of course, is to establish their own status and reputation. Because by giving awards, the givers always also signal that they are in a position to confer prestige on others.

Awards help the awards-givers establish their own status and gain a more favorable reputation. By what is called a basking in others’ glory, basking in reflected glory, by giving awards to somebody who already has a good reputation, my own reputation is, of course, then also improved.

The second reason is that awards allow the givers to structure the field by signaling clearly what is considered high quality. When we’re talking about the cultural sector, performance is ambiguous; it’s difficult for outsiders to observe what is high quality and what is not so high quality. By giving awards, you try at least to establish what can be considered high quality. You also create role models.

And you do create a networking occasion where all the “in” group members have to attend that occasion if they still want to be in the “in” group.

Not only did the Nobel Prize shift the standard a bit by giving the Nobel Prize for literature to Bob Dylan, he also said, Thank you, but I’m not going to show up.

There are a number of benefits to giving awards but there are also risks. And that is one of the risks. There are risks for the giver, that the giver either chooses an award recipient who then doesn’t show up or who publicly explains why he or she does not accept the award. That has also happened with state orders such as the Legion d’honneur in France, where Thomas Piketty, whom many people know because of his work on capital in the 21st century, he declined to receive this award.

Oftentimes those snubs, those instances where candidates refuse to accept the award create more or gain more attention than the cases where people accept the awards.

Let me give you two examples of that with the Oscars. One of them was Marlon Brando, who refused to accept the best actor award for “The Godfather,” and the other was George C. Scott, who refused the best actor Oscar for “Patton.” He once said the Oscars were a “two-hour meat parade.” What happens to winners’ reputations when they may almost sound like they’re saying, I’m too good for your award?

You could argue it has a positive impact on their reputations because it clearly signals that they have such a great high reputation that they are in a position to even decline that honor. It also makes a very public potentially political statement as was the practice with some of those snubs. Of course, knowing this can happen, many award-givers actually make sure in advance that the person whom they select will also ultimately accept the award.

What’s an economist’s interest in awards?

My original interest is really in how we motivate people and what motivates people, and in particular, looking at non-monetary incentives more specifically. And awards are very interesting non-financial, non-monetary incentives.

But first I had to show with my empirical studies that even purely symbolic awards would have a motivational effect on people. Standard economics would say no, we only care about monetary incentives and pecuniary rewards. But we all know how much we care about being recognized by others.

So I ran field experiments to show what was actually put on Wikipedia, where people operate on pseudonyms, so there’s no material consequence of getting an award on Wikipedia. And I was able to show this had a massive impact on people’s motivation and efforts to continue to contribute to this online encyclopedia as editors.

Napoleon originated the Legion d’honneur, and said a soldier will fight long and hard for a bit of colored ribbon, which is a tremendous piece of human psychology.

We know from various studies that individuals are even willing to incur costs to attain purely symbolic status. That is the social comparison dimension of awards.

Also, we value attention and we could even argue that nowadays, where there is information everywhere and there are different sources competing for our attention, that that is the ultimate scarce resource. If people receive an award, they get others’ attention, and that can be very motivating for them.

If someone gets an award, how is it perceived? Is it like the culmination of a career, or is it a stimulus to further performance?

There are different awards. Some are given for lifetime achievement, like the Nobel Prizes, for instance. And those seem to be more like the culmination of a very successful career.

And some people argue that it’s risky, they can have negative effects, that they divert the person’s attention to things such as giving talks at the expense of doing more research or further excelling in what they have been good at all the time.

In other instances, you might fear that awards can led to hubris or can cause the phenomenon where people would rest on their laurels

But on the other hand we also have early career awards in different fields where they ideally lead to a further performance enhancement. I’ve also studied the effects of academic awards, and we see that after receiving prestigious awards — in economics, for example — those awards recipients’ further publications in journals still improve and go up.

Do non-financial awards and prizes like Napoleon’s bit of ribbon, or an Oscar, have different effects on people than financial awards?

Yes though we still need to do more research on that. The study of awards and in particular their effect on performance is very young.

But when awards are given out in a context where people volunteer, they can have long-lasting effects that last for over a year. In contrast, we know the effect of financial incentives and money tends to be short lived. Also people adjust their expectation to receiving bonuses, so you always have to further increase the bonuses for employees with distinctions and recognition.

Ideally, awards are designed such that they still motivate those who haven’t yet received them to still get an award at some point. But there will always be non-winners, because by definition the number of awards has to be kept scarce if they are to remain valuable. On the part of non-winners, they can provoke envy — even lead to sabotage. They can also hamper cooperation. So those are the risks of handing out awards that award givers have to be aware of.

Another interesting fact concerns negative prizes. In the Tour de France there is the lanterne rouge, the red lantern, which was given to the person who comes in last.

Now getting some attention may arguably be better than getting no attention in terms of considering future advertising gigs. At some point, people made a race for coming in last. Then they tried to punish those racers because of course it would no longer be the normal Tour de France as we would want to see it. We don’t want people to be too slow at the very end to try to race for that last place.

In movies there are also negative awards — the Golden Raspberries, for bad movies and bad performances. How do people react to those awards?

It is interesting that some actors still go and also receive those awards. And then the question is, why? Whether it’s about the attention, that some attention is better than no attention? Or to signal that you don’t care, and you stand above those silly signals?

Much study has been done of the Oscars and how winners fare; some see their careers prosper, others tended to flatline a bit.

I’m not an expert on the Oscars per se. I do know that the nominations are already very important in terms of financial returns. I do not know whether there are some whose career trajectory afterwards is not as good as it could otherwise be, but it would be difficult to argue that this was because of the award.

The people who were nominated but don’t win say it was an honor just to be nominated. Do you believe them?

Yes, sure. Being nominated gets the movie or the actors attention, and in some context that can be good. Now, not winning [after] being nominated clearly shows that the person was considered and then deemed not good enough, or worse than the other contenders. It is difficult to look into people’s minds.

Sure, they would have been more happy had they won the award, but if it’s about attention, then certainly being nominated can already have a massive impact in financial terms. Psychologically, for those people, the rest of the point would be, I could have won, so there might also be some frustration. But if that frustration leads to superior performances after this one award, and possibly further awards down the road, that would be positive.

You’ve heard discussions about children’s events where everybody gets a trophy. You’ve thought about the future of award and you’ve referred to a saturation point. Have we reached it?

It is difficult to say what is the optimal number of awards. There are some fields where it seems that the number of awards that are handed out has reached the point where there are too many awards, and then they just lose in value, or they might even be ridiculed.

In America, in schools there are way more awards than in other countries such as Switzerland, where I lived before coming to the United States. We do know is that the more awards there are, at some point they just start losing value.

What do you think as you watch the Oscars? Are you taking notes for a future paper?

I would certainly like to study the Oscars now that I live in L.A., so I will be very attentive and see what I can find when I watch the Oscars.

Knowing what you know, would getting an award make you happy now?

It depends on what the award is given for, but yes, getting peers’ recognition and knowing that what one does has an impact certainly would make me happy!

Follow the Opinion section on Twitter @latimesopinion or Facebook