IDEAS home Printed from https://ideas.repec.org/p/clg/wpaper/2014-83.html
   My bibliography  Save this paper

Ambiguity in Performance Pay: An Online Experiment

Author

Listed:
  • David Johnson

    (University of Calgary)

  • David Cooper

Abstract

Many incentive plans are inherently ambiguous, lacking an explicit mapping between performance and compensation. Using an online labor market, Amazon Mechanical Turk, we study the effect of ambiguity on willingness to accept contracts to do a real-effort task as well as completion and performance of this task. Ambiguity about the relationship between performance and compensation affects the willingness of individuals to accept contracts and the likelihood of quitting before completion, but not performance. These effects are non-monotonic in the level of ambiguity. Information about ability at the task reduces willingness to accept and increases quitting, but does not affect performance.

Suggested Citation

  • David Johnson & David Cooper, "undated". "Ambiguity in Performance Pay: An Online Experiment," Working Papers 2014-83, Department of Economics, University of Calgary, revised 10 Nov 2014.
  • Handle: RePEc:clg:wpaper:2014-83
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jim Engle-Warnick & Sonia Laszlo, 2017. "Learning-by-doing in an ambiguous environment," Journal of Risk and Uncertainty, Springer, vol. 55(1), pages 71-94, August.
    2. Maselli,Ilaria & Fabo, Brian, 2015. "Digital workers by design? An example from the on-demand economy," CEPS Papers 11030, Centre for European Policy Studies.
    3. David B. Johnson & Matthew D. Webb, 2016. "Decision Making with Risky, Rival Outcomes: Theory and Evidence," Carleton Economic Papers 16-12, Carleton University, Department of Economics.
    4. David Johnson & Sebastian Goerg & Jonathan Rogers, "undated". "Can't Touch This! Similarity And Willingness to Keep "Dirty Money"," Working Papers 2014-81, Department of Economics, University of Calgary, revised 10 Nov 2014.
    5. David Blake Johnson, 2016. "(Please Don't) Say It to My Face! The Interaction of Feedback and Distance: Experiments with Vulgar Language," Kyklos, Wiley Blackwell, vol. 69(2), pages 336-368, May.
    6. Oechssler, Jörg & Roomets, Alex, 2015. "A test of mechanical ambiguity," Journal of Economic Behavior & Organization, Elsevier, vol. 119(C), pages 153-162.

    More about this item

    Keywords

    ambiguity; incentives; performance pay; quitting; online experiment;

    JEL classification:

    • C99 - Mathematical and Quantitative Methods - - Design of Experiments - - - Other
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:clg:wpaper:2014-83. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Department of Economics). General contact details of provider: http://edirc.repec.org/data/declgca.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.