Working Paper: CEPR ID: DP8921
Authors: Florian Englmaier; Andreas Roider; Uwe Sunde
Abstract: Incentive schemes affect performance and priorities of agents but, in reality, they can be complicated even for simple tasks. We analyze the effects of the salience of incentives in a team production setting where the principal has an interest in quantity and quality of output. We use data from a controlled field experiment that changed the communication of the incentive system without changing the incentive system. The results indicate that salience of incentives itself is statistically and economically important for performance. We find that higher salience of incentives for quantity increases quantity, reduces quality, and increases in-pocket income of team managers.
Keywords: attention; communication; field experiments; incentives; salience
JEL Codes: D03; D80; J30; M52
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Increased salience of quantity incentives (C92) | Increased quantity of lettuce harvested per shift (J43) |
| Increased salience of quantity incentives (C92) | Increased quality malus points (L15) |
| Increased salience of quantity incentives (C92) | Increased team managers' incomes (M52) |