Capital and Labor Effects in a Recall Task: More Evidence in Support of Camerer and Hogarth (1999)
This paper extends existing evidence on the interaction and relative productivity of cognitive effort and cognitive capital in an experimental environment. I focus on the impact of task-specific cognitive capital, which is central to the capital-labor argument of Camerer and Hogarth (1999) as well as related research in cognitive science and behavioral decision making. Using a memory recall task situated in an accounting setting, I show that the impact of taskspecific accounting knowledge on recall performance varies with the timing of the introduction of performance-contingent financial incentives. I further illustrate that subjects better endowed with task-specific accounting knowledge greater improve recall performance in response to the introduction of performance-contingent financial incentives. I draw implications for further research of the capital-labor-production framework and for compensation practices in experiments as well as work settings.
|Date of creation:||Jun 2005|
|Date of revision:|
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- Roland Bénabou & Jean Tirole, 2002. "Self-Confidence and Personal Motivation," The Quarterly Journal of Economics, Oxford University Press, vol. 117(3), pages 871-915.
- Roland Bénabou & Jean Tirole, 2003. "Intrinsic and Extrinsic Motivation," Review of Economic Studies, Oxford University Press, vol. 70(3), pages 489-520.
- Rydval, Ondrej & Ortmann, Andreas, 2004.
"How financial incentives and cognitive abilities affect task performance in laboratory settings: an illustration,"
Elsevier, vol. 85(3), pages 315-320, December.
- Ondrej Rydval & Andreas Ortmann, 2004. "How financial incentives and cognitive abilities affect task performance in laboratory settings: An illustration," CERGE-EI Working Papers wp221, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
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