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Prepayment effect: Prepayment with clawback increases task participation

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  • Jie, Yun

Abstract

What constitutes effective means, other than increasing payment, to turn non-participants into participants in a task/program is an important concern in marketing and management. Although prepayment that leverages reciprocity was shown to increase mail response rates, it failed to apply to other contexts. The current study incorporated the element of commitment and clawing back in a prepayment program and successfully extended such program's effect on individuals' participation (vs. effort). By leveraging present bias and loss aversion, we were able to motivate individuals' willingness to accept the prepayment initially and then to show up for tasks subsequently. The proposed prepayment program has a wide range of potential applications.

Suggested Citation

  • Jie, Yun, 2018. "Prepayment effect: Prepayment with clawback increases task participation," Journal of Business Research, Elsevier, vol. 92(C), pages 210-218.
    • Handle: RePEc:eee:jbrese:v:92:y:2018:i:c:p:210-218
    DOI: 10.1016/j.jbusres.2018.07.048
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    Cited by:

    1. Jie, Yun, 2020. "Responding to requests for help: Effects of payoff schemes with small monetary units," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 88(C).

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