Reward Choices: Experimental Evidence on Cognitive Task Performance

This study examines the effect of a tangible reward choice in task settings that require varying levels of cognitive effort from participants. We employ a laboratory experiment in which we manipulate both the availability of a reward choice (i.e., participants either choose among a set of tangible rewards or they are assigned one), and task difficulty (i.e., a simple task versus a more cognitively demanding task). Drawing on insights from behavioral economics we predict that reward choice and task difficulty interact such that reward choice, compared to no reward choice, increases task performance more in cognitively demanding tasks than in simpler tasks. Our results are consistent with this prediction. Consistent with our theory, we find that reward choice, compared to no choice, enables individuals to align their reward selection with their preferences. This preference matching mediates the relationship between reward choice and task performance, but only in cognitively demanding tasks. We contribute to the literature on incentives by demonstrating that offering a choice of rewards can enhance task performance, particularly in tasks that require greater cognitive effort.