The Effect of Monetary Incentives on Cognitive Effort, Emotions and Test-Solving Performance

Juan Castro, Gustavo Yamada, Hans Contreras, Freddy Linares and Herwig Watson
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Hans Contreras: Universidad Nacional Mayor de San Marcos
Freddy Linares: Neurometrics
Herwig Watson: Neurometrics

No 131, Working Papers from Peruvian Economic Association

Abstract: The relation between monetary incentives, cognitive effort and task performance has been extensively studied. There is, however, scant experimental evidence about the concurrent effect of incentives on cognitive effort and emotions, and its implications for task performance. It is well documented that high-stakes tests correlate with students’ anxiety and performance, but the available evidence is not causal. In this paper we estimate the effect of providing a monetary prize on the cognitive effort, emotions and efficacy exhibited by a group of university students when solving a set of four mathematics and logical reasoning questions. The prize was conditional on answering all questions correctly and was randomly assigned within a group of 126 participants. We find that the incentive produced more cognitive effort but this did not translate into increased test-solving efficacy. We provide evidence suggesting that the absence of increased efficacy despite the greater input of cognitive effort can be linked to the participants’ emotional response to the prize.

Keywords: Cognitive effort; emotions; monetary incentives; eye-tracking; facial expressions (search for similar items in EconPapers)
JEL-codes: C91 D91 (search for similar items in EconPapers)
Date: 2018-12
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-hrm and nep-neu
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Persistent link: https://EconPapers.repec.org/RePEc:apc:wpaper:131

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