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Choking under time pressure: The influence of deadline-dependent bonus and malus incentive schemes on performance

Listed author(s):
  • Essl, Andrea
  • Jaussi, Stefanie
Registered author(s):

    Many economically relevant activities are executed under notable time pressures. Incentivized deadlines are often the reason people feel pressured. In such an environment, individual preferences can predict performance. Through a laboratory experiment, we examine the predictive power of individual loss aversion on performance under deadline-dependent incentives. Participants worked on a real effort task under two payoff-equivalent contracts framed in bonus and malus terms. The results show lower performance for individuals with high loss aversion when working under a malus contract. These individuals needed more time to reply and were less able to avoid maluses than other individuals. Choking can explain this observed behavior.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0167268116302554
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    Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

    Volume (Year): 133 (2017)
    Issue (Month): C ()
    Pages: 127-137

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    Handle: RePEc:eee:jeborg:v:133:y:2017:i:c:p:127-137
    DOI: 10.1016/j.jebo.2016.11.001
    Contact details of provider: Web page: http://www.elsevier.com/locate/jebo

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