IDEAS home Printed from https://ideas.repec.org/p/swe/wpaper/2014-07.html
   My bibliography  Save this paper

On Uneven Expected Earnings in the Lab

Author

Listed:
  • Jade Wong

    (Australian School of Business, the University of New South Wales)

  • Andreas Ortmann

    (School of Economics, Australian School of Business, the University of New South WalesAuthor-Name: Craig Freedman)

Abstract

We discuss ways to cope with uneven expected lab earnings that are the likely results of role assignments. We identify three problems associated with uneven earnings in the lab: of social preferences, of low marginal return for effort, and of perceived deception. Mining the opinions of respondents from the Economic Science Association’s (ESA) discussion list, the literature, and drawing on our own experience, we present five responses experimenters can use to mitigate the three problems. We discuss the merits and drawbacks of each strategy.

Suggested Citation

  • Jade Wong & Andreas Ortmann, 2014. "On Uneven Expected Earnings in the Lab," Discussion Papers 2014-07, School of Economics, The University of New South Wales.
  • Handle: RePEc:swe:wpaper:2014-07
    as

    Download full text from publisher

    File URL: http://research.economics.unsw.edu.au/RePEc/papers/2014-07.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Uri Gneezy & Aldo Rustichini, 2000. "Pay Enough or Don't Pay at All," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 791-810.
    2. Andreas Ortmann & Ralph Hertwig, 2002. "The Costs of Deception: Evidence from Psychology," Experimental Economics, Springer;Economic Science Association, vol. 5(2), pages 111-131, October.
    3. Todd L. Cherry & Peter Frykblom & Jason F. Shogren, 2002. "Hardnose the Dictator," American Economic Review, American Economic Association, vol. 92(4), pages 1218-1221, September.
    4. Ernst Fehr & Klaus M. Schmidt, 2004. "Fairness and Incentives in a Multi‐task Principal–Agent Model," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(3), pages 453-474, October.
    5. Ernst Fehr & Alexander Klein & Klaus M Schmidt, 2007. "Fairness and Contract Design," Econometrica, Econometric Society, vol. 75(1), pages 121-154, January.
    6. Rene Bekkers, 2007. "Measuring altruistic behavior in surveys: The all-or-nothing dictator game," Artefactual Field Experiments 00102, The Field Experiments Website.
    7. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
    8. Daniel Zizzo, 2010. "Experimenter demand effects in economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 13(1), pages 75-98, March.
    9. Anthony Ziegelmeyer & Katrin Schmelz & Matteo Ploner, 2012. "Hidden costs of control: four repetitions and an extension," Experimental Economics, Springer;Economic Science Association, vol. 15(2), pages 323-340, June.
    10. Ismael Rodriguez-Lara & Luis Moreno-Garrido, 2012. "Self-interest and fairness: self-serving choices of justice principles," Experimental Economics, Springer;Economic Science Association, vol. 15(1), pages 158-175, March.
    11. Jade Wong & Andreas Ortman & Alberto Motta & Le Zhang, 2013. "Understanding Social Impact Bonds and Their Alternatives: An Experimental Investigation," Discussion Papers 2013-21, School of Economics, The University of New South Wales.
    12. Rydval, Ondrej & Ortmann, Andreas, 2004. "How financial incentives and cognitive abilities affect task performance in laboratory settings: an illustration," Economics Letters, Elsevier, vol. 85(3), pages 315-320, December.
    13. Jason Dana & Roberto Weber & Jason Kuang, 2007. "Exploiting moral wiggle room: experiments demonstrating an illusory preference for fairness," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 33(1), pages 67-80, October.
    14. Michael Kosfeld & Armin Falk, 2006. "The Hidden Costs of Control," American Economic Review, American Economic Association, vol. 96(5), pages 1611-1630, December.
    15. Johnson, Eric J. & Camerer, Colin & Sen, Sankar & Rymon, Talia, 2002. "Detecting Failures of Backward Induction: Monitoring Information Search in Sequential Bargaining," Journal of Economic Theory, Elsevier, vol. 104(1), pages 16-47, May.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Voslinsky, Alisa & Azar, Ofer H., 2021. "Incentives in experimental economics," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 93(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jade Wong & Andreas Ortman & Alberto Motta & Le Zhang, 2013. "Understanding Social Impact Bonds and Their Alternatives: An Experimental Investigation," Discussion Papers 2013-21, School of Economics, The University of New South Wales.
    2. Andreas Ortmann & Ralph Hertwig, 2006. "Monetary Incentives: Usually Neither Necessary Nor Sufficient?," CERGE-EI Working Papers wp307, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    3. Masella, Paolo & Meier, Stephan & Zahn, Philipp, 2014. "Incentives and group identity," Games and Economic Behavior, Elsevier, vol. 86(C), pages 12-25.
    4. Charness, Gary & Kuhn, Peter, 2011. "Lab Labor: What Can Labor Economists Learn from the Lab?," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 3, pages 229-330, Elsevier.
    5. Silvester Van Koten & Andreas Ortmann & Vitezslav Babicky, 2013. "Fairness in Risky Environments: Theory and Evidence," Games, MDPI, vol. 4(2), pages 1-35, May.
    6. Cunyat, Antoni & Sloof, Randolph, 2011. "Employee types and endogenous organizational design: An experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 80(3), pages 553-573.
    7. Zhang, Le & Ortmann, Andreas, 2016. "Pro-social or anti-social, or both? A within- and between-subjects study of social preferences," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 62(C), pages 23-32.
    8. Ernst Fehr & Klaus M. Schmidt, 2007. "Adding a Stick to the Carrot? The Interaction of Bonuses and Fines," American Economic Review, American Economic Association, vol. 97(2), pages 177-181, May.
    9. Linardi, Sera & McConnell, Margaret A., 2011. "No excuses for good behavior: Volunteering and the social environment," Journal of Public Economics, Elsevier, vol. 95(5), pages 445-454.
    10. Larney, Andrea & Rotella, Amanda & Barclay, Pat, 2019. "Stake size effects in ultimatum game and dictator game offers: A meta-analysis," Organizational Behavior and Human Decision Processes, Elsevier, vol. 151(C), pages 61-72.
    11. Özalp Özer & Upender Subramanian & Yu Wang, 2018. "Information Sharing, Advice Provision, or Delegation: What Leads to Higher Trust and Trustworthiness?," Management Science, INFORMS, vol. 64(1), pages 474-493, January.
    12. Jared Rubin & Anya Samek & Roman M. Sheremeta, 2016. "Incentivizing Quantity and Quality of Output: An Experimental Investigation of the Quantity-Quality Trade-off," Working Papers 16-01, Chapman University, Economic Science Institute.
    13. Recalde, María P. & Riedl, Arno & Vesterlund, Lise, 2018. "Error-prone inference from response time: The case of intuitive generosity in public-good games," Journal of Public Economics, Elsevier, vol. 160(C), pages 132-147.
    14. Veronica Rattini, 2023. "Worker autonomy and performance: Evidence from a real‐effort experiment," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 32(2), pages 300-327, April.
    15. Vanessa Valero, 2022. "Redistribution and beliefs about the source of income inequality," Experimental Economics, Springer;Economic Science Association, vol. 25(3), pages 876-901, June.
    16. Esteban F. Klor & Sebastian Kube & Eyal Winter & Ro'i Zultan, 2011. "Can Higher Bonuses Lead to Less E ort? Incentive Reversal in Teams," Levine's Working Paper Archive 786969000000000073, David K. Levine.
    17. Herz, Holger & Schmutzler, Armin & Volk, André, 2019. "Cooperation and mistrust in relational contracts," Journal of Economic Behavior & Organization, Elsevier, vol. 166(C), pages 366-380.
    18. Kosfeld, Michael, 2019. "The Role of Leaders in Inducing and Maintaining Cooperation: The CC Strategy," IZA Discussion Papers 12540, Institute of Labor Economics (IZA).
    19. Sääksvuori, Lauri & Ramalingam, Abhijit, 2015. "Bargaining under surveillance: Evidence from a three-person ultimatum game," Journal of Economic Psychology, Elsevier, vol. 51(C), pages 66-78.
    20. Bowles, Samuel & Hwang, Sung-Ha, 2008. "Social preferences and public economics: Mechanism design when social preferences depend on incentives," Journal of Public Economics, Elsevier, vol. 92(8-9), pages 1811-1820, August.

    More about this item

    Keywords

    uneven expected lab earnings; social preferences; preferences;
    All these keywords.

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:swe:wpaper:2014-07. See general information about how to correct material in RePEc.

    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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Hongyi Li (email available below). General contact details of provider: https://edirc.repec.org/data/senswau.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.