One size fits all? The interplay of incentives, effort provision, and personality
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Presented by: Stefania Bortolotti
Incentives are supposed to increase effort, yet individuals react differently to incentives.
We examine this heterogeneity by investigating how personal characteristics,
preferences, and socio-economic background relate to incentives and performance in
a real effort task. We analyze the performance of 1,914 high-school students under
a Fixed, Variable, or Tournament incentive scheme. Ability and beliefs about relative
performance play a decisive role for productivity when incentive schemes are
exogenously imposed. Yet, when given the choice to select the incentive scheme,
also personality traits, economic preferences and socio-economic background matter.
Algorithmic assignment of incentive schemes could improve productivity, as we show.
We examine this heterogeneity by investigating how personal characteristics,
preferences, and socio-economic background relate to incentives and performance in
a real effort task. We analyze the performance of 1,914 high-school students under
a Fixed, Variable, or Tournament incentive scheme. Ability and beliefs about relative
performance play a decisive role for productivity when incentive schemes are
exogenously imposed. Yet, when given the choice to select the incentive scheme,
also personality traits, economic preferences and socio-economic background matter.
Algorithmic assignment of incentive schemes could improve productivity, as we show.