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- Publisher
- Springer Journals
- Copyright
- Copyright © 1999 by Kluwer Academic Publishers
- Subject
- Economics; Economic Theory/Quantitative Economics/Mathematical Methods; Microeconomics; Operation Research/Decision Theory; Environmental Economics
- ISSN
- 0895-5646
- eISSN
- 1573-0476
- DOI
- 10.1023/A:1007850605129
- Publisher site
- See Article on Publisher Site
Abstract
We review 74 experiments with no, low, or high performance-based financial incentives. The modal result has 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.
Journal
Journal of Risk and Uncertainty – Springer Journals
Published: Sep 28, 2004