Working Paper: NBER ID: w22193
Authors: Stefano DellaVigna; Devin Pope
Abstract: How much do different monetary and non-monetary motivators induce costly effort? Does the effectiveness line up with the expectations of researchers? We present the results of a large-scale real-effort experiment with 18 treatment arms. We compare the effect of three motivators: (i) standard incentives; (ii) behavioral factors like present-bias, reference dependence, and social preferences; and (iii) non-monetary inducements from psychology. In addition, we elicit forecasts by behavioral experts regarding the effectiveness of the treatments, allowing us to compare results to expectations. We find that (i) monetary incentives work largely as expected, including a very low piece rate treatment which does not crowd out incentives; (ii) the evidence is partly consistent with standard behavioral models, including warm glow, though we do not find evidence of probability weighting; (iii) the psychological motivators are effective, but less so than incentives. We then compare the results to forecasts by 208 experts. On average, the experts anticipate several key features, like the effectiveness of psychological motivators. A sizeable share of experts, however, expects crowd-out, probability weighting, and pure altruism, counterfactually. This heterogeneity does not reflect field of training, as behavioral economists, standard economists, and psychologists make similar forecasts. Using a simple model, we back out key parameters for social preferences, time preferences, and reference dependence, comparing expert beliefs and experimental results.
Keywords: effort; monetary incentives; nonmonetary motivators; behavioral economics; expert forecasts
JEL Codes: C9; C93; D03
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Monetary incentives (M52) | Effort (D29) |
| Psychological motivators (D91) | Effort (D29) |
| Charitable giving components (D64) | Effort (D29) |
| Delayed payments (J33) | Effort (D29) |
| Probabilistic incentives (D80) | Effort (D29) |