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Competitive Incentives: Working Harder or Working Smarter?

Author

Listed:
  • Anat Bracha

    () (Research Department, Federal Reserve Bank of Boston, Boston, Massachusetts 02210)

  • Chaim Fershtman

    () (The Eitan Berglas School of Economics, Tel Aviv University, Tel Aviv, Israel 69978; Centre for Economic Policy Research, London EC1V 3PZ, United Kingdom; and Tinbergen Institute, 3062 PA Rotterdam, The Netherlands)

Abstract

Almost all jobs require a combination of cognitive effort and labor effort. This paper focuses on the effect that competitive incentive schemes have on the chosen combination of these two types of efforts. We use an experimental approach to show that competitive incentives may induce agents to work harder but not necessarily smarter. This effect was stronger for women. This paper was accepted by John List, behavioral economics.

Suggested Citation

  • Anat Bracha & Chaim Fershtman, 2013. "Competitive Incentives: Working Harder or Working Smarter?," Management Science, INFORMS, vol. 59(4), pages 771-781, April.
  • Handle: RePEc:inm:ormnsc:v:59:y:2013:i:4:p:771-781
    DOI: 10.1287/mnsc.1120.1597
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    File URL: http://dx.doi.org/10.1287/mnsc.1120.1597
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. V. Rattini, 2016. "Managing the Workload: an Experiment on Individual Decision Making and Performance," Working Papers wp1080, Dipartimento Scienze Economiche, Universita' di Bologna.
    2. Jared Rubin & Anya Samek & Roman M. Sheremeta, 2018. "Loss aversion and the quantity–quality tradeoff," Experimental Economics, Springer;Economic Science Association, vol. 21(2), pages 292-315, June.
    3. Bradler, Christiane & Neckermann, Susanne & Warnke, Arne Jonas, 2016. "Incentivizing creativity: A large-scale experiment with tournaments and gifts," ZEW Discussion Papers 16-040, ZEW - Leibniz Centre for European Economic Research.
    4. Niaz Asadullah & Alain Trannoy & Sandy Tubeuf & Gaston Yalonetzky, 2018. "Fair and unfair educational inequality in a developing country: The role of pupil’s effort," Working Papers 474, ECINEQ, Society for the Study of Economic Inequality.
    5. Essl, Andrea & Jaussi, Stefanie, 2017. "Choking under time pressure: The influence of deadline-dependent bonus and malus incentive schemes on performance," Journal of Economic Behavior & Organization, Elsevier, vol. 133(C), pages 127-137.
    6. Jared Rubin & Anya Samek & Roman Sheremeta, 2016. "Incentivizing Quantity and Quality of Output: An Experimental Investigation of The Quantity-Quality Trade-Off," Artefactual Field Experiments 00438, The Field Experiments Website.
    7. Bruno S. Frey & Jana Gallus, 2014. "Awards are a Special Kind of Signal," CREMA Working Paper Series 2014-04, Center for Research in Economics, Management and the Arts (CREMA).
    8. Schreck, Philipp, 2015. "Honesty in managerial reporting: How competition affects the benefits and costs of lying," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 27(C), pages 177-188.
    9. Minkyung Kim & K. Sudhir & Kosuke Uetake, 2019. "A Structural Model of a Multitasking Salesforce: Job Task Allocation and Incentive Plan Design," Cowles Foundation Discussion Papers 2199, Cowles Foundation for Research in Economics, Yale University.
    10. Tim Straub & Henner Gimpel & Florian Teschner & Christof Weinhardt, 2015. "How (not) to Incent Crowd Workers," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 57(3), pages 167-179, June.

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