Financial incentives and academic performance: An experimental study

Noemí Herranz-Zarzoso () and Gerardo Sabater-Grande ()
Additional contact information
Noemí Herranz-Zarzoso: LEE and Department of Economics, Universitat Jaume I, Castellón, Spain
Gerardo Sabater-Grande: LEE and Department of Economics, Universitat Jaume I, Castellón, Spain

No 2016/18, Working Papers from Economics Department, Universitat Jaume I, Castellón (Spain)

Abstract: This paper analyzes the effect of financial incentives on academic performance by means of a randomized field experiment. Using two alternative payment mechanisms we implement two experimental treatments designed to motivate students depending on their absolute or relative academic performance. Subjects, recruited among students from Microeconomics, were split in two groups depending on whether they had a failed background in the aforementioned subject (returning students) or not (new students). New students were informed that they would receive a reward depending on their bet (the grade they thought would achieve) and the real grade obtained. In the case of the returning students, the reward was calculated taking into account the bet, the obtained real grade and their improvement with respect to previous semesters. In the first treatment students were rewarded according to a piece rate system whereas in the second one we established two rankings (one for new students and another one for returning students) classifying them depending on their academic performance. In both treatments we find that the implemented incentives are effective to increase the average of grades for both types of students (new and returning), but the piece rate mechanism is more powerful to motivate a higher number of students.

Keywords: Betting for grades; incentives; academic performance; piece rate mechanism; rank-order tournament (search for similar items in EconPapers)
JEL-codes: C93 D03 I21 J24 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2016
New Economics Papers: this item is included in nep-cbe, nep-edu, nep-exp, nep-hrm and nep-sog
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.doctreballeco.uji.es/wpficheros/Herranz_and_Sabater_18_2016.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:jau:wpaper:2016/18

Access Statistics for this paper

More papers in Working Papers from Economics Department, Universitat Jaume I, Castellón (Spain) Contact information at EDIRC.
Bibliographic data for series maintained by María Aurora Garcia Gallego ().