Multitasking, Learning, and Incentives: A Cautionary Tale
AbstractWe develop a multi-period, multi-task principal-agent model in which neither the principal nor the agent knows the mapping from actions to outputs. The agent can learn about the production function over time by exerting effort and observing output. The model has a stark prediction: incentives may have a negative impact on agent effort if, by exerting effort, they learn their ability is lower than their prior beliefs. To provide evidence on the model’s predictions, we conduct a field experiment in fifty Houston public schools, where students, parents, and teachers were rewarded with financial incentives. The experimental data is consistent with the model’s most distinguishing predictions, though other explanations are possible.
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Date of creation: Jan 2012
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- I20 - Health, Education, and Welfare - - Education - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-01-25 (All new papers)
- NEP-EDU-2012-01-25 (Education)
- NEP-LAB-2012-01-25 (Labour Economics)
- NEP-URE-2012-01-25 (Urban & Real Estate Economics)
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