Work for Image and Work for Pay
AbstractStandard economic models with complete information predict a positive, monotonic relationship between pay and performance. This prediction does not always hold in experimental tests: offering a small payment may result in lower performance than not offering any payment. We test experimentally two main explanations that have been put forward for this result: the "incomplete contract" hypothesis views the payment rule as a signal given to subjects on purpose of the activity. The "informed principal" hypothesis views it as a signal concerning the characteristics of the agent or of the task. The incomplete contract view appears to offer the best overall explanation for our results. We also find that high-powered monetary incentives do not "crowd out" intrinsic motivation, but may elicit "too much" effort when intrinsic motivation is very high.
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Bibliographic InfoPaper provided by Toulouse School of Economics (TSE) in its series TSE Working Papers with number 11-252.
Date of creation: 10 Sep 2011
Date of revision:
Other versions of this item:
- NEP-ALL-2011-11-28 (All new papers)
- NEP-CBE-2011-11-28 (Cognitive & Behavioural Economics)
- NEP-CTA-2011-11-28 (Contract Theory & Applications)
- NEP-EXP-2011-11-28 (Experimental Economics)
- NEP-HRM-2011-11-28 (Human Capital & Human Resource Management)
- NEP-LMA-2011-11-28 (Labor Markets - Supply, Demand, & Wages)
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- Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
- Gill, David & Prowse, Victoria, 2012.
"Cognitive ability and learning to play equilibrium: A level-k analysis,"
38317, University Library of Munich, Germany, revised 23 Apr 2012.
- David Gill & Victoria Prowse, 2013. "Cognitive ability and learning to play equilibrium: A level-k analysis," Economics Series Working Papers 641, University of Oxford, Department of Economics.
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