Financial Incentives and Performance: A Meta-Analysis of Economics Evidence

Petr Cala, Tomas Havranek, Zuzana Irsova, Jindřich Matoušek and Jiri Novak
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Petr Cala: Charles University, Prague, Czech Republic

No 2022/27, Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies

Abstract: Standard economics models require that financial incentives improve performance, while leading theories in psychology allow for the opposite. Experimental results are mixed, and so far have not been corrected for publication bias and model uncertainty. We collect 1,568 economics estimates together with 46 factors capturing the context in which the estimates were obtained. We use novel nonlinear techniques to correct for publication bias and em- ploy Bayesian model averaging to account for model uncertainty. The corrected estimates are zero or tiny across contexts of field experiments, including differences in performance measurement, task definition, reward size and framing, motivation beyond money, subject pool, and estimation technique. Laboratory experiments produce statistically significant estimates on average after correction for publication bias, but even there the effect is weak. Experimental economics evidence is inconsistent with standard economics models.

Keywords: incentives; experiments; meta-analysis; model uncertainty; publi- cation bias (search for similar items in EconPapers)
JEL-codes: C90 D91 M52 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2022-11, Revised 2022-11
New Economics Papers: this item is included in nep-exp and nep-hrm
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Citations: View citations in EconPapers (1)

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https://ies.fsv.cuni.cz/en/research/working-papers/6711 (application/pdf)

Related works:
Working Paper: Financial Incentives and Performance: A Meta-Analysis of Economics Evidence (2022)
Working Paper: Financial Incentives and Performance: A Meta-Analysis of Economics Evidence (2022)
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