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Framing manipulations in contests: A natural field experiment

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  • Hong, Fuhai
  • Hossain, Tanjim
  • List, John A.

Abstract

Exploiting findings that losses loom larger than gains, studies have shown that framing manipulations can increase productivity of workers. Using a natural field experiment that exogenously manipulates wage bonuses within contests in a Chinese high-tech manufacturing facility, we show that how loss aversion affects worker behavior critically depends on the incentive scheme as well as the framing manipulation. Four sets of two identical teams competed against each other to win a bonus given to the team, within a set, with the higher average hourly productivity over the week. In each set, the bonus was framed as a reward or gain for one team and as a punishment or loss for the other. Average weekly productivity was slightly higher under the loss treatment, but this increase was statistically insignificant. However, the team under the loss treatment was at least 35% more likely to win the contest. As teams’ payoffs are based on relative productivity under a contest, framing effect is much stronger in terms of relative productivity. Finally, workers seemingly responded to the bonus by increasing the quality of production as well as quantity—defect rate fell as productivity increased.

Suggested Citation

  • Hong, Fuhai & Hossain, Tanjim & List, John A., 2015. "Framing manipulations in contests: A natural field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 118(C), pages 372-382.
  • Handle: RePEc:eee:jeborg:v:118:y:2015:i:c:p:372-382
    DOI: 10.1016/j.jebo.2015.02.014
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    3. Jin, Liyin & Li, Lingfang (Ivy) & Zhou, Yi & Zhou, Yifang, 2022. "How to Remind People to Work Out via Feedback: Evidence from a Field Experiment," MPRA Paper 112418, University Library of Munich, Germany.
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    5. Tova Levin & Steven Levitt & John List, 2015. "A Glimpse into the World of High Capacity Givers: Experimental Evidence from a University Capital Campaign," Natural Field Experiments 00409, The Field Experiments Website.
    6. Bettina Rockenbach & Sebastian Schneiders & Marcin Waligora, 2018. "Pushing the bad away: reverse Tullock contests," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 4(1), pages 73-85, July.
    7. Mylène Lagarde & Duane Blaauw, 2021. "Effects of incentive framing on performance and effort: evidence from a medically framed experiment," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 7(1), pages 33-48, September.
    8. Alasdair Brown & Fuyu Yang, 2021. "Framing effects and the market selection hypothesis: Evidence from real‐world isomorphic bets," Southern Economic Journal, John Wiley & Sons, vol. 88(1), pages 399-413, July.
    9. Astrid, Gamba & Luca, Stanca, 2016. "Mis-Judging Merit: The Effects of Adjudication Errors in Contests," Working Papers 345, University of Milano-Bicocca, Department of Economics, revised 14 Jul 2016.
    10. Kris De Jaegher, 2019. "Strategic framing to influence clients’ risky decisions," Theory and Decision, Springer, vol. 86(3), pages 437-462, May.
    11. Hoffmann, Christin & Thommes, Kirsten, 2020. "Using loss aversion to incentivize energy efficiency in a principal–agent context — Evidence from a field experiment," Economics Letters, Elsevier, vol. 189(C).
    12. Jonathan Quidt & Francesco Fallucchi & Felix Kölle & Daniele Nosenzo & Simone Quercia, 2017. "Bonus versus penalty: How robust are the effects of contract framing?," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 3(2), pages 174-182, December.
    13. Zhengyang Bao & Andreas Leibbrandt, 2020. "Tournaments with Safeguards: A Blessing or a Curse for Women?," Monash Economics Working Papers 02-20, Monash University, Department of Economics.
    14. De Paola, Maria & Gioia, Francesca & Pupo, Valeria, 2020. "Selection and Incentives under Time Pressure: The Importance of Framing," IZA Discussion Papers 13474, Institute of Labor Economics (IZA).
    15. Wagner, Valentin, 2022. "Heterogeneous effects of grade framing," Labour Economics, Elsevier, vol. 74(C).
    16. Yaroslav Rosokha & Kenneth Younge, 2020. "Motivating Innovation: The Effect of Loss Aversion on the Willingness to Persist," The Review of Economics and Statistics, MIT Press, vol. 102(3), pages 569-582, July.
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    18. Gong, Jie & Liu, Tracy Xiao & Tang, Jie, 2021. "How monetary incentives improve outcomes in MOOCs: Evidence from a field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 190(C), pages 905-921.
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    More about this item

    Keywords

    Framing effect; Field experiment; Worker productivity; Contests; Loss aversion; Incentive contracts;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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