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Incentives to Persevere

Author

Listed:
  • Elif Incekara-Hafalir

    (University of Technology Sydney)

  • Grace HY Lee

    (Monash University (Malaysia))

  • Audrey KL Siah

    (Monash University (Malaysia))

  • Erte Xiao

    (Monash University)

Abstract

Achieving success often requires persistent efforts. We study the effectiveness of two reward mechanisms, all-or-nothing and piece-rate, to incentivize full completion of repeated tasks over a period of time. Data from two randomized controlled trials show that the full completion rate under the all-or-nothing mechanism does not differ from that under the regular piece-rate mechanism. However, when given the choice between the all-or-nothing and piece-rate mechanisms in a third (self-select) treatment, a significant number of participants chose the all-or-nothing mechanism despite the risk. The overall full completion rate is significantly higher in the self select treatment than the piece-rate treatment. Our results highlight the importance of choice in incentivising persistent efforts.

Suggested Citation

  • Elif Incekara-Hafalir & Grace HY Lee & Audrey KL Siah & Erte Xiao, 2019. "Incentives to Persevere," Working Paper Series 2019/06, Economics Discipline Group, UTS Business School, University of Technology, Sydney.
    • Handle: RePEc:uts:ecowps:2019/06
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Perseverance; incentives; self-control; field experiments;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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