The effects of financial incentives in experiments: A review and capital-labor-production framework. (With commentaries)

DOI10.1023/A:1007850605129MaRDI QIDQ1972117zbMATH OpenFDO

Authors Colin Camerer, Robin M. Hogarth

Publication date 27 August 2000

Published in Journal of Risk and Uncertainty (Search for Journal in Brave)

Full work available at URL https://doi.org/10.1023/A:1007850605129

zbMATH Keywords

bounded rationalityexperimental economicsexperimental methodologyincentivesjudgmentrationality

Mathematics Subject Classification ID

Review text

The authors review 74 experirnents with no, low, or high performance-based financial incentives. The modal result is no effect on mean performance (though variance is usually reduced by higher payment). Higher incentive does improve performance often, typically judgment tasks that are responsive to better effort. Incentives also reduce ``presentation effects (e.g., generosity and risk-seeking). Incentive effects are comparable to effects of other variables, particularly ``cognitive capital and task ``production demands, and interact with those variables, so a narrow-minded focus on incentives alone is misguided. We also note that no replicated study has made rationality violations disappear purely by raising incentives.

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(74)

• The human side of mechanism design: a tribute to Leo Hurwicz and Jean-Jacque Laffont
• Probability weighting and the `level' and `spacing' of outcomes: an experimental study over losses
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• Equilibrium play and adaptive learning in a three-person centipede game.
• Performance and learning in a simulation of oil industry dynamics.
• Rationality with preference discovery costs
• Psychology of game playing: introduction to a special issue
• Incentive magnitude effects in experimental games: bigger is not necessarily better
• From windfall sharing to property ownership: prosocial personality traits in giving and taking dictator games
• Does inducing choice procedures make individuals better off? An experimental study
• Do economists punish less?
• Playing a game or making a decision? Methodological issues in the measurement of distributional preferences
• It is whether you win or lose: the importance of the overall probabilities of winning or losing in risky choice
• Confidence in knowledge or confidence in the ability to learn: an experiment on the causal effects of beliefs on motivation
• Loss aversion and scale compatibility in two-attribute trade-offs
• Causes of Allais common consequence paradoxes: an experimental dissection
• Public good and private good valuation for waiting time reduction: a laboratory study
• The effect of stakes in distribution experiments
• Second-price auction tournament
• Does stake size matter for cooperation and punishment?
• Do financial professionals behave according to prospect theory? An experimental study
• A note on equally spaced categories as an optimization problem
• Incentives and group identity
• Effects of decision training on individuals' decision-making proactivity
• How the proportion of people who agree to perform a task depends on the stimulus: a theoretical explanation of the empirical formula
• Number sense, trading decisions and mispricing: an experiment
• A gift with thoughtfulness: a field experiment on work incentives
• Preference reversals: the impact of truth-revealing monetary incentives
• On the conjunction fallacy in probability judgment: new experimental evidence regarding Linda
• Meaningful learning and transfer of learning in games played repeatedly without feedback
• Examining monotonicity and saliency using level-\(k\) reasoning in a voting game
• Do we value mobility?
• Monetary incentives versus class credit: evidence from a large classroom trust experiment
• Trust and trustworthiness across different age groups
• Do trade union leaders violate subjective expected utility? some insights from experimental data
• Are non-contingent incentives more effective in motivating \textit{new} behavior? Evidence from the field
• Feigning ignorance for long-term gains
• Reconciling introspective utility with revealed preference: experimental arguments based on prospect theory
• Large Stakes and Big Mistakes
• Framing of incentives and effort provision
• Measuring the time stability of prospect theory preferences
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• What motivates effort? Evidence and expert forecasts
• Testing the theory of multitasking: evidence from a natural field experiment in Chinese factories
• Intrinsic and Extrinsic Motivation
• Reconsidering the common ratio effect: the roles of compound independence, reduction, and coalescing
• Tax farming redux: experimental evidence on performance pay for tax collectors
• Moment Risks: Investment for Self and for a Firm
• Satisficing search versus aspiration adaptation in sales competition: Experimental evidence
• A comparison of salient rewards in experiments: Money and class points
• A test of (weak) certainty independence
• Use of contextual and model-based information in adjusting promotional forecasts
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• High-stakes failures of backward induction
• Emotion at stake -- the role of stake size and emotions in a power-to-take game experiment in China with a comparison to Europe
• Paying {\textsterling}1({\textsterling}5) or nothing in dictator games: unexpected differences
• Economic juries and public project provision
• The ratio bias phenomenon: fact or artifact?
• Stochastic choice and the allocation of cognitive effort
• A comparison of five models that predict violations of first-order stochastic dominance in risky decision making
• Loss averse behavior
• The limitations of experimental design: A case study involving monetary incentive effects in laboratory markets
• Learning from mistakes: What do inconsistent choices over risk tell us?
• Gender pairing and bargaining -- beware the same sex!
• A parametric analysis of prospect theory's functionals for the general population
• Stability of risk preferences and the reflection effect of prospect theory
• A further critique of cumulative prospect theory and related approaches
• Experimental perspectives on incentives in organisations
• Cumulative prospect theory's functional menagerie
• Stake size and the power of focal points in coordination games: experimental evidence
• A tractable method to measure utility and loss aversion under prospect theory
• Employee-stock-options, production/service functions and game theory
• Competence effects for choices involving gains and losses
• Overconfidence in tournaments: evidence from the field

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