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Monetary and social incentives in multi-tasking: The ranking substitution effect

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  • Stefan, Matthias
  • Huber, Jürgen
  • Kirchler, Michael
  • Sutter, Matthias
  • Walzl, Markus

Abstract

Rankings are intended as incentive tools on labor markets. Yet, when agents perform multiple tasks, rankings might have unintended side-effects, especially if not all tasks can be ranked with respect to performance. We analyze the dynamics of multi-tasking and present an experiment with 286 finance professionals in which we identify hidden ranking costs when performance in one task is ranked while in another prosocial task it is not. We find that subjects lagging behind (leading) in the ranked task devote less (more) effort to the prosocial task. We discuss implications for optimal incentive schemes in organizations with multi-tasking.

Suggested Citation

  • Stefan, Matthias & Huber, Jürgen & Kirchler, Michael & Sutter, Matthias & Walzl, Markus, 2023. "Monetary and social incentives in multi-tasking: The ranking substitution effect," European Economic Review, Elsevier, vol. 156(C).
    • Handle: RePEc:eee:eecrev:v:156:y:2023:i:c:s0014292123000879
    DOI: 10.1016/j.euroecorev.2023.104458
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    More about this item

    Keywords

    Multi-tasking decision; Rank incentives; Artefactual field experiment; Finance professionals;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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