Does a Short-Term Increase in Incentives Boost Performance?

Angelova, Vera; Giebe, Thomas; Ivanova-Stenzel, Radosveta (2017): Does a Short-Term Increase in Incentives Boost Performance? Collaborative Research Center Transregio 190, Discussion Paper No. 60

Abstract

If agents are exposed to continual competitive pressure, how does a short-term variation of the severity of the competition affect agents' performance? In a real-effort laboratory experiment, we study a one-time increase in incentives in a sequence of equally incentivized contests. Our results suggest that a short-term increase in incentives induces a behavioral response but does not boost total performance.

• Item Type: Paper (Discussion Paper)
• Keywords: contest; tournament; real-effort; experiment; contract theory; forward-looking
• Faculties: Economics > Collaborative Research Center Transregio "Rationality and Competition"
• Subjects: 300 Social sciences > 330 Economics
• JEL Classification: C91, D91, J22, J33, L02, M05
• Language: English