The Effect of Financial Incentives and Task-specific Cognitive Abilities on Task Performance
AbstractWe extend evidence on the interaction between financial incentives and cognitive abilities by focusing on the effect of task-specific abilities. In a memory-intensive task situated in an accounting context, the effect of accounting education on performance is stronger under financial incentives as compared to flat rate pay. Subjects with more accounting education respond stronger to financial incentives. Hence using incentives efficiently may involve targeting them at high-ability individuals. More generally, taking into account the incentive-ability interaction seems important when interpreting observed behavior in cognitively demanding lab and field economic environments.
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Bibliographic InfoPaper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2011-050.
Date of creation: 03 Nov 2011
Date of revision:
Financial incentives; Cognitive ability; Performance; Experiment;
Find related papers by JEL classification:
- C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-11-07 (All new papers)
- NEP-CBE-2011-11-07 (Cognitive & Behavioural Economics)
- NEP-EXP-2011-11-07 (Experimental Economics)
- NEP-HRM-2011-11-07 (Human Capital & Human Resource Management)
- NEP-LAB-2011-11-07 (Labour Economics)
- NEP-NEU-2011-11-07 (Neuroeconomics)
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