The Effects of Financial Incentives in Experiments: A Review and Capital-Labor-Production Framework
We review 74 experiments 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 eff...
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| Veröffentlicht in: | Journal of risk and uncertainty 1999-12, Vol.19 (1/3), p.7-42 |
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| container_title | Journal of risk and uncertainty |
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| creator | CAMERER, COLIN F. HOGARTH, ROBIN M. |
| description | We review 74 experiments 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. |
| doi_str_mv | 10.1023/a:1007850605129 |
| format | Article |
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| subjects | Behavior Economic incentives Economic methodology Economic theory Economics Economists Experimental economics Experimental methods Experimental psychology Experimentation Experiments Financial incentives Game theory Group incentives Incentive pay Incentives Judgement Knowledge Memory Monetary incentives Motivation Production capital Psychologists Rationality Risk Risk taking Skills Statistical analysis Studies Tax incentives Uncertainty |
| title | The Effects of Financial Incentives in Experiments: A Review and Capital-Labor-Production Framework |
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