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Awards as Incentives

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  • Susanne Neckermann
  • Bruno S. Frey

Abstract

Non-monetary incentives in the form of awards have so far escaped the attention of economists despite their widespread use. This paper presents an experiment conducted online at IBM to assess the impact of these kinds of extrinsic incentives. Introducing a hypothetical award has statistically significant effects on stated contributions to a public good. Our design allows the estimation of the impact of different award characteristics related to, for example, how public or how valuable the award is. We illustrate these findings by providing predictions about the behavior induced by a new award at IBM.

Suggested Citation

  • Susanne Neckermann & Bruno S. Frey, 2008. "Awards as Incentives," CREMA Working Paper Series 2008-31, Center for Research in Economics, Management and the Arts (CREMA).
  • Handle: RePEc:cra:wpaper:2008-31
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    Cited by:

    1. Bruno S. Frey & Susanne Neckermann, 2008. "Awards in Economics - Towards a New Field of Inquiry," CREMA Working Paper Series 2008-33, Center for Research in Economics, Management and the Arts (CREMA).
    2. Stark, Oded & Zawojska, Ewa & Kohler, Wilhelm & Szczygielski, Krzysztof, 2018. "An adverse social welfare effect of a doubly gainful trade," Journal of Development Economics, Elsevier, vol. 135(C), pages 77-84.
    3. Hammermann, Andrea & Mohnen, Alwine, 2014. "The pric(z)e of hard work," Journal of Economic Psychology, Elsevier, vol. 43(C), pages 1-15.
    4. Bruno S. Frey, 2011. "Punishment – and Beyond," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 5(2), June.
    5. Stark, Oded, 2019. "Behavior in reverse: reasons for return migration," Behavioural Public Policy, Cambridge University Press, vol. 3(1), pages 104-126, May.
    6. Lacetera, Nicola & Macis, Mario, 2010. "Do all material incentives for pro-social activities backfire? The response to cash and non-cash incentives for blood donations," Journal of Economic Psychology, Elsevier, vol. 31(4), pages 738-748, August.
    7. Bruno S. Frey & Susanne Neckermann, 2013. "Awards play an important role," Chapters, in: Francisco Cabrillo & Miguel A. Puchades-Navarro (ed.), Constitutional Economics and Public Institutions, chapter 17, pages 313-321, Edward Elgar Publishing.
    8. Luigino Bruni & Fabrizio Panebianco & Alessandra Smerilli, 2014. "Beyond Carrots and Sticks: How Cooperation and Its Rewards Evolve Together," Review of Social Economy, Taylor & Francis Journals, vol. 72(1), pages 55-82, March.
    9. Oded Stark & Jan Fałkowski, 2019. "On structural change, the social stress of a farming population, and the political economy of farm support," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 27(1), pages 201-222, January.
    10. Neckermann, Susanne & Cueni, Reto & Frey, Bruno S., 2014. "Awards at work," Labour Economics, Elsevier, vol. 31(C), pages 205-217.
    11. Oded Stark, 2017. "Migration when Social Preferences are Ordinal: Steady-state Population Distribution and Social Welfare," Economica, London School of Economics and Political Science, vol. 84(336), pages 647-666, October.
    12. Bruno S. Frey & Susanne Neckermann, 2009. "Academics Appreciate Awards - A New Aspect of Incentives in Research," CESifo Working Paper Series 2531, CESifo.
    13. Bruno S. Frey & Susanne Neckermann, 2008. "Academics Appreciate Awards. A New Aspect of Incentives in Research," CREMA Working Paper Series 2008-32, Center for Research in Economics, Management and the Arts (CREMA).
    14. Singh, Prakarsh, 2011. "Performance Pay and Information: Reducing Child Malnutrition in Urban Slums," MPRA Paper 29403, University Library of Munich, Germany.
    15. Bruno S. Frey & Susanne Neckermann, 2009. "Awards in Economics - Towards a New Field of Inquiry," CESifo Working Paper Series 2515, CESifo.
    16. Bruno S. Frey, 2010. "Geld oder Anerkennung? Zur Ökonomik der Auszeichnungen," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 11(1), pages 1-15, February.
    17. Camelia M. Kuhnen & Agnieszka Tymula, 2012. "Feedback, Self-Esteem, and Performance in Organizations," Management Science, INFORMS, vol. 58(1), pages 94-113, January.
    18. Lacetera, Nicola & Macis, Mario, 2008. "Social Image Concerns and Pro-Social Behavior," IZA Discussion Papers 3771, Institute of Labor Economics (IZA).
    19. Susanne Neckermann & Reto Cueni & Bruno S. Frey, 2009. "What is an Award Worth? An Econometric Assessment of the Impact of Awards on Employee Performance," CESifo Working Paper Series 2657, CESifo.

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    More about this item

    Keywords

    incentives; non-monetary compensation; awards; motivation; experiment;
    All these keywords.

    JEL classification:

    • C99 - Mathematical and Quantitative Methods - - Design of Experiments - - - Other
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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