Working Paper: CEPR ID: DP8834
Authors: Nava Ashraf; Oriana Bandiera; Kelsey Jack
Abstract: A substantial body of research investigates the design of incentives in firms, yet less is known about incentives in organizations that hire individuals to perform tasks with positive social spillovers. We conduct a field experiment in which agents hired by a public health organization are randomly allocated to four groups. Agents in the control group receive a standard volunteer contract often offered for this type of task, whereas agents in the three treatment groups receive small financial rewards, large financial rewards, and non-financial rewards, respectively. The analysis yields three main findings. First, non-financial rewards are more effective at eliciting effort than either financial rewards or the volunteer contract. The effect of financial rewards, both large and small, is much smaller and not significantly different from zero. Second, non-financial rewards elicit effort both by leveraging intrinsic motivation for the cause and by facilitating social comparison among agents. Third, contrary to existing laboratory evidence, financial incentives do not crowd out intrinsic motivation in this setting.
Keywords: incentives; intrinsic motivation; nonmonetary rewards
JEL Codes: D82; J33; M52; O15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| nonfinancial rewards (M52) | sales performance (L25) |
| nonfinancial rewards (M52) | likelihood of making any sale (M31) |
| financial rewards (M52) | sales performance (L25) |
| nonfinancial rewards (M52) | intrinsic motivation (O31) |
| intrinsic motivation (O31) | sales performance (L25) |
| financial rewards (M52) | intrinsic motivation (O31) |
| high financial rewards (G11) | sales performance (L25) |