Results from laboratory experiments using real-effort tasks provide mixed evidence on the relationship between monetary incentives and effort provision. To examine this issue, we design three experiments where subjects participate in two-player real-effort tournaments with two prizes. Experiment 1 shows that subjects exert high effort even if there are no monetary incentives, suggesting that non-monetary incentives are contributing to their effort choices. Moreover, increasing monetary incentives does not result in higher effort provision. Experiment 2 shows that the impact of non-monetary incentives can be reduced by providing subjects with the option of leaving the laboratory early, using an incentivized timeout button, or working on an incentivized alternative activity. Experiment 3 revisits the relationship between monetary incentives and effort provision using the insights from Experiment 2. Using a design with an incentivized alternative activity, we show that participants increase effort in response to monetary incentives. Taken together, the findings from the three experiments suggest that results from real-effort tasks require a careful evaluation and interpretation of the motivations underlying the observed performance.
“Impact of rebates and refunds on contributions to threshold public goods: Evidence from a field experiment,” with Matthew Donazzan and Nisvan Erkal, 2016, Southern Economic Journal, 83(1), 69-86. [link] [pdf]
We investigate the impact of rebates and refunds on contributions to threshold public goods using evidence from a field experiment conducted in conjunction with an Australian charity, Life Goes On. We find that offering rebates and refunds has a significant positive impact on both participation and average donations in the absence of seed money. Our results suggest that offering rebates and refunds, and the existence of seed money may, to some extent, play substitute roles in encouraging giving behavior. Seed money has a significant positive effect on participation only. Seed money’s impact on average donations may be mitigated by a threshold effect.
“By chance or by choice? Biased attribution of others’ outcomes,” with Nisvan Erkal and Lata Gangadharan. [pdf] (under review)
(Previously titled: “Attribution biases in leadership: Is it effort or luck?”)
Decision makers in positions of power often make unobserved choices under risk and uncertainty. In many cases, they face a trade-off between maximizing their own payoff and those of other individuals. What inferences are made in such instances about their choices when only outcomes are observable? Using a laboratory experiment, we investigate whether outcomes are attributed to luck or to choices. We show that attribution biases exist in the evaluation of good outcomes. In particular, decision makers receive too little credit for their successes. Importantly, these biases tend to be driven by individuals who make the selfish choice themselves when placed in the role of the decision maker.
It is becoming increasingly common for researchers to elicit individuals’ beliefs in controlled experiments to understand the underlying motivations of decision makers. We evaluate the performance of the quadratic scoring rule (QSR) and the binarized scoring rule (BSR) in an environment where subjects report probabilistic beliefs over binary outcomes when the probabilities are objectively known to them. We find that reported beliefs are less accurate under the QSR than the BSR at the aggregate level. Consistent with theoretical predictions, risk-averse subjects tend to distort their reported beliefs under the QSR.