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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 List
  • Migiwa Tanaka

Abstract

A well-recognized problem in the multitasking literature is that workers might substantially reduce their effort on tasks that produce unobservable outputs as they seek the salient rewards to observable outputs. Since the theory related to multitasking is decades ahead of the empirical evidence, the economic costs of standard incentive schemes under multitasking contexts remain largely unknown. This study provides empirical insights quantifying such effects using a field experiment in Chinese factories. Using more than 2200 data points across 126 workers, we find sharp evidence that workers do trade off the incented output (quantity) at the expense of the non-incented one (quality) as a result of a piece rate bonus scheme. Consistent with our theoretical model, treatment effects are much stronger for workers whose base salary structure is a flat wage compared to those under a piece rate base salary. While the incentives result in a large increase in quantity and a sharp decrease in quality for workers under a flat base salary, they result only in a small increase in quantity without affecting quality for workers under a piece rate base salary.

Suggested Citation

  • Fuhai Hong & Tanjim Hossain & John List & Migiwa Tanaka, 2013. "Testing the Theory of Multitasking: Evidence from a Natural Field Experiment in Chinese Factories," Natural Field Experiments 00388, The Field Experiments Website.
  • Handle: RePEc:feb:natura:00388
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    References listed on IDEAS

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    Cited by:

    1. Committee, Nobel Prize, 2016. "Oliver Hart and Bengt Holmström: Contract Theory," Nobel Prize in Economics documents 2016-1, Nobel Prize Committee.
    2. Marta De Philippis, 2015. "Multitask Agents and Incentives: The Case of Teaching and Research for University Professors," CEP Discussion Papers dp1386, Centre for Economic Performance, LSE.
    3. Laske, Katharina & Schröder, Marina, 2017. "Quantity, Quality and Originality: The Effects of Incentives on Creativity," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168151, Verein für Socialpolitik / German Economic Association.
    4. Eduard Marinov, 2016. "The 2016 Nobel Prize in Economics," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 97-149.
    5. repec:iza:izawol:journl:2017:n:362 is not listed on IDEAS
    6. Englmaier, Florian & Roider, Andreas & Sunde, Uwe, 2014. "The Role of Communication of Performance Schemes: Evidence from a Field Experiment," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 507, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.

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    JEL classification:

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

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