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Testing The Theory Of Multitasking: Evidence From A Natural Field Experiment In Chinese Factories

Author

Listed:
  • Fuhai Hong
  • Tanjim Hossain
  • John A. List
  • Migiwa Tanaka

Abstract

Using a natural field experiment, we quantify the impact of one†dimensional performance†based incentives on incentivized (quantity) and nonincentivized (quality) dimensions of output for factory workers with a flat†rate or a piece†rate base salary. In particular, we observe output quality by hiring quality inspectors unbeknownst to the workers. We find that workers trade off quality for quantity, but the effect is statistically significant only for workers under a flat†rate base salary. This variation in treatment effects is consistent with a simple theoretical model that predicts that when agents are already incented at the margin, the quantity–quality trade†off resulting from performance pay is less prominent.

Suggested Citation

  • Fuhai Hong & Tanjim Hossain & John A. List & Migiwa Tanaka, 2018. "Testing The Theory Of Multitasking: Evidence From A Natural Field Experiment In Chinese Factories," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 59(2), pages 511-536, May.
    • Handle: RePEc:wly:iecrev:v:59:y:2018:i:2:p:511-536
    DOI: 10.1111/iere.12278
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    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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