Pay Enough Or Don'T Pay At All
Economists usually assume that monetary incentives improve performance, and psychologists claim that the opposite may happen. We present and discuss a set of experiments designed to test these contrasting claims. We found that the effect of monetary compensation on performance was not monotonic. In the treatments in which money was offered, a larger amount yielded a higher performance. However, offering money did not always produce an improvement: subjects who were offered monetary incentives performed more poorly than those who were offered no compensation. Several possible interpretations of the results are discussed. © 2000 the President and Fellows of Harvard College and the Massachusetts Institute of Technology
Volume (Year): 115 (2000)
Issue (Month): 3 (August)
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