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Abstract

High rewards or the threat of severe punishment provide strong motivation but also create psychological pressure, which might induce performance decrements. By analyzing the performance of professional football players in penalty kick situations, the paper provides empirical evidence for the existence of detrimental incentive effects. Two pressure variables are considered in particular: (1) the importance of success and (2) the presence of spectators. There are plenty of situations in which pressure arises in the workplace. Knowing how individuals perform under pressure conditions is crucial because it has implications for the design of the workplace and the design of incentive schemes.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 65 (2008)
Issue (Month): 3-4 (March)
Pages: 636-653

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Handle: RePEc:eee:jeborg:v:65:y:2008:i:3-4:p:636-653

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Web page: http://www.elsevier.com/locate/jebo

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Find related papers by JEL classification:

• M54 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Labor Management
• Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Social and Economic Stratification

References

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1. Kandel, Eugene & Lazear, Edward P, 1992. "Peer Pressure and Partnerships," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 801-17, August.
   
   • Kandel, E. & Lazear, E.P., 1989. "Peer Pressure And Partnership," Working Papers e-89-5, Hoover Institution, Stanford University.
   • Kandel, E. & Lazear, E.P., 1990. "Peer Pressure and Partnerships," Papers 90-07, Rochester, Business - Managerial Economics Research Center.
2. Canice Prendergast, 1999. "The Provision of Incentives in Firms," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 7-63, March.
3. Bruce Shearer, 2004. "Piece Rates, Fixed Wages and Incentives: Evidence from a Field Experiment," Review of Economic Studies, Wiley Blackwell, vol. 71(2), pages 513-534, 04.
4. Falk, Armin & Ichino, Andrea, 2003. "Clean Evidence on Peer Pressure," CEPR Discussion Papers 3834, C.E.P.R. Discussion Papers.
   
   • Falk, Armin & Ichino, Andrea, 2003. "Clean Evidence on Peer Pressure," IZA Discussion Papers 732, Institute for the Study of Labor (IZA).
   • Armin Falk & Andrea Ichino, 2003. "Clean evidence on peer pressure," Natural Field Experiments 00239, The Field Experiments Website.
   • Armin Falk & Andrea Ichino, . "Clean Evidence on Peer Pressure," IEW - Working Papers 144, Institute for Empirical Research in Economics - University of Zurich.
5. George A. Akerlof, 1997. "Social Distance and Social Decisions," Econometrica, Econometric Society, vol. 65(5), pages 1005-1028, September.
6. Armin Falk & Andrea Ichino, 2006. "Clean Evidence on Peer Effects," Journal of Labor Economics, University of Chicago Press, vol. 24(1), pages 39-58, January.
   
   • Armin Falk & Andrea Ichino, 2004. "Clean Evidence on Peer Effects," Levine's Bibliography 666156000000000439, UCLA Department of Economics.
7. Harry J. Paarsch & Bruce S. Shearer, 1999. "The Response of Worker Effort to Piece Rates: Evidence from the British Columbia Tree-Planting Industry," Journal of Human Resources, University of Wisconsin Press, vol. 34(4), pages 643-667.
8. Frey, Bruno S & Jegen, Reto, 2001. " Motivation Crowding Theory," Journal of Economic Surveys, Wiley Blackwell, vol. 15(5), pages 589-611, December.
9. Akerlof, George A, 1980. "A Theory of Social Custom, of Which Unemployment May be One Consequence," The Quarterly Journal of Economics, MIT Press, vol. 94(4), pages 749-75, June.
   
   • George A. Akerlof, 1978. "A theory of social custom, of which unemployment may be one consequence," Special Studies Papers 118, Board of Governors of the Federal Reserve System (U.S.).
10. Spagnolo, Giancarlo, 1999. "Social relations and cooperation in organizations," Journal of Economic Behavior & Organization, Elsevier, vol. 38(1), pages 1-25, January.
11. Ignacio Palacios-Huerta, 2003. "Professionals Play Minimax," Review of Economic Studies, Wiley Blackwell, vol. 70(2), pages 395-415, 04.
    
    • Ignacio Palacios-Huerta, 2001. "Professionals Play Minimax," Working Papers 2001-17, Brown University, Department of Economics.
12. Edward P. Lazear, 2000. "Performance Pay and Productivity," American Economic Review, American Economic Association, vol. 90(5), pages 1346-1361, December.
    
    • Edward P. Lazear, 1996. "Performance Pay and Productivity," NBER Working Papers 5672, National Bureau of Economic Research, Inc.
13. Dohmen, Thomas, 2005. "Social Pressure Influences Decisions of Individuals: Evidence from the Behavior of Football Referees," IZA Discussion Papers 1595, Institute for the Study of Labor (IZA).
14. Uri Gneezy & Aldo Rustichini, 2004. "Gender and Competition at a Young Age," American Economic Review, American Economic Association, vol. 94(2), pages 377-381, May.
15. David Austen-Smith & Roland G. Fryer, 2003. "The Economics of 'Acting White'," NBER Working Papers 9904, National Bureau of Economic Research, Inc.
16. Uri Gneezy & Aldo Rustichini, 2000. "Pay Enough Or Don'T Pay At All," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 791-810, August.
17. Bernheim, B Douglas, 1994. "A Theory of Conformity," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 841-77, October.
18. P.-A. Chiappori, 2002. "Testing Mixed-Strategy Equilibria When Players Are Heterogeneous: The Case of Penalty Kicks in Soccer," American Economic Review, American Economic Association, vol. 92(4), pages 1138-1151, September.
19. Dan Ariely & Uri Gneezy & George Loewenstein & Nina Mazar, 2005. "Large stakes and big mistakes," Working Papers 05-11, Federal Reserve Bank of Boston.
20. repec:feb:framed:0027 is not listed on IDEAS

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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:

1. How bonuses backfire
   by chris dillow in Stumbling and Mumbling on 2011-09-19 14:06:31
2. Does fear work?
   by chris dillow in Stumbling and Mumbling on 2011-07-31 13:55:23
3. Does Fear of Job Loss Work?
   by Mark Thoma in Economist's View on 2011-08-03 07:33:00
4. Do Professionals Choke Under Pressure?
   by Ariel Goldring in Free Market Mojo on 2010-08-22 16:17:36
5. The left & shareholder activism
   by chris dillow in Stumbling and Mumbling on 2012-05-08 13:51:01

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

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Cited by:

1. Böheim, René & Lackner, Mario, 2013. "Gender and Competition: Evidence from Jumping Competitions," IZA Discussion Papers 7243, Institute for the Study of Labor (IZA).
   
   • René Böheim & Mario Lackner, 2013. "Gender and Competition: Evidence from Jumping Competitions," Economics working papers 2013-05, Department of Economics, Johannes Kepler University Linz, Austria.
2. Eriksson, Tor & Poulsen, Anders & Villeval, Marie Claire, 2008. "Feedback and Incentives: Experimental Evidence," IZA Discussion Papers 3440, Institute for the Study of Labor (IZA).
   
   • Eriksson, Tor & Poulsen, Anders & Villeval, Marie Claire, 2009. "Feedback and incentives: Experimental evidence," Labour Economics, Elsevier, vol. 16(6), pages 679-688, December.
   • Tor Eriksson & Anders Poulsen & Marie-Claire Villeval, 2009. "Feedback and incentives: Experimental evidence," Post-Print halshs-00451557, HAL.
   • Tor Eriksson & Anders Poulsen & Marie-Claire Villeval, 2008. "Feedback and Incentives : Experimental Evidence," Working Papers 0812, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.
   • Tor Eriksson & Anders Poulsen & Marie-Claire Villeval, 2008. "Feedback and Incentives : Experimental Evidence," Post-Print halshs-00276396, HAL.
3. Paserman, Daniele, 2007. "Gender Differences in Performance in Competitive Environments: Evidence from Professional Tennis Players," IZA Discussion Papers 2834, Institute for the Study of Labor (IZA).
   
   • Paserman, Marco Daniele, 2007. "Gender Differences in Performance in Competitive Environments: Evidence from Professional Tennis Players," CEPR Discussion Papers 6335, C.E.P.R. Discussion Papers.
   • M. Daniele Paserman, 2010. "Gender Differences in Performance in Competitive Environments? Evidence from Professional Tennis Players," Boston University - Department of Economics - Working Papers Series WP2010-047, Boston University - Department of Economics.
4. Lukas Menkhoff & Maik Schmeling & Ulrich Schmidt, 2010. "Are All Professional Investors Sophisticated?," German Economic Review, Verein für Socialpolitik, vol. 11, pages 418-440, November.
   
   • Menkhoff, Lukas & Schmeling, Maik & Schmidt, Ulrich, 2008. "Are all professional investors sophisticated?," Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät der Leibniz Universität Hannover dp-397, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
5. Björn Bartling & Leif Brandes & Daniel Schunk, 2012. "Expectations as reference points: field evidence from experienced subjects in a competitive, high-stakes environment," ECON - Working Papers 073, Department of Economics - University of Zurich.
   
   • Björn Bartling & Leif Brandes & Daniel Schunk, 2012. "Expectations as Reference Points: Field Evidence from Experienced Subjects in a Competitive, High-Stakes Environment," CESifo Working Paper Series 3830, CESifo Group Munich.
6. Grichnik, Dietmar & Smeja, Alexander & Welpe, Isabell, 2010. "The importance of being emotional: How do emotions affect entrepreneurial opportunity evaluation and exploitation?," Journal of Economic Behavior & Organization, Elsevier, vol. 76(1), pages 15-29, October.
7. Bannier, Christina E. & Feess, Eberhard, 2010. "When high-powered incentive contracts reduce performance: choking under pressure as a screening device," Frankfurt School - Working Paper Series 135, Frankfurt School of Finance and Management.
8. Christos Genakos & Mario Pagliero, 2009. "Risk Taking and Performance in Multistage Tournaments: Evidence from Weightlifting Competitions," CEP Discussion Papers dp0928, Centre for Economic Performance, LSE.
9. Benoît, Jean-Pierre & Dubra, Juan & Moore, Don, 2009. "Does the Better-Than-Average Effect Show That People Are Overconfident?: An Experiment," MPRA Paper 13168, University Library of Munich, Germany.

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