Working Paper: CEPR ID: DP13226
Authors: Florian Englmaier; Stefan Grimm; David Schindler; Simeon Schudy
Abstract: Despite the prevalence of non-routine analytical team tasks in modern economies, little is known about how incentives influence performance in these tasks. In a field experiment with more than 3000 participants, we document a positive effect of bonus incentives on the probability of completion of such a task. Bonus incentives increase performance due to the reward rather than the reference point (performance threshold) they provide. The framing of bonuses (as gains or losses) plays a minor role. Incentives improve performance also in an additional sample of presumably less motivated workers. However, incentives reduce these workers' willingness to "explore" original solutions.
Keywords: team work; bonus incentives; loss; gain; nonroutine; exploration
JEL Codes: C92; C93; J33; D03; M52
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| reward component of the bonus (J33) | performance improvements (D29) |
| framing of bonus (J33) | performance outcomes (L25) |
| incentives (M52) | willingness to explore original solutions (O36) |
| incentives (M52) | willingness to explore original solutions (student teams) (O36) |
| bonus incentives (M52) | team performance (M54) |
| bonus incentives (M52) | probability of completing the task within 45 minutes (C41) |