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Effects of incentive framing on performance and effort: evidence from a medically framed experiment

Lagarde, Mylène and Blaauw, Duane (2021) Effects of incentive framing on performance and effort: evidence from a medically framed experiment. Journal of the Economic Science Association. ISSN 2199-6784

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Identification Number: 10.1007/s40881-021-00100-0

Abstract

We study the effects on performance of incentives framed as gains or losses, as well as the effort channels through which individuals increase performance. We also explore potential spill-over effects on a non-incentivised activity. Subjects participated in a medically framed real-effort task under one of the three contracts, varying the type of performance incentive received: (1) no incentive; (2) incentive framed as a gain; or (3) incentive framed as a loss. We find that performance improved similarly with incentives framed as losses or gains. However, individuals increase performance differently under the two frames: potential losses increase participants’ performance through a greater attention (fewer mistakes), while bonuses increase the time spent on the rewarded activity. There is no spill-over effect, either negative or positive, on the non-incentivised activity. We discuss the meaning and implications of our results for the design of performance contracts.

Item Type: Article
Official URL: https://www.springer.com/journal/40881
Additional Information: © 2021 The Authors
Divisions: Health Policy
Subjects: R Medicine > RA Public aspects of medicine
Q Science > Q Science (General)
JEL classification: C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C91 - Laboratory, Individual Behavior
D - Microeconomics > D6 - Welfare Economics > D64 - Altruism
I - Health, Education, and Welfare > I1 - Health > I11 - Analysis of Health Care Markets
Date Deposited: 15 Jun 2021 13:57
Last Modified: 21 Jul 2021 14:00
URI: http://eprints.lse.ac.uk/id/eprint/110864

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