The Effect of Financial Incentives and Task-specific Cognitive Abilities on Task Performance

Ondrej Rydval

No 2011-050, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: We extend evidence on the interaction between financial incentives and cognitive abilities by focusing on the effect of task-specific abilities. In a memory-intensive task situated in an accounting context, the effect of accounting education on performance is stronger under financial incentives as compared to flat rate pay. Subjects with more accounting education respond stronger to financial incentives. Hence using incentives efficiently may involve targeting them at high-ability individuals. More generally, taking into account the incentive-ability interaction seems important when interpreting observed behavior in cognitively demanding lab and field economic environments.

Keywords: Financial incentives; Cognitive ability; Performance; Experiment (search for similar items in EconPapers)
JEL-codes: C81 C91 C93 D83 (search for similar items in EconPapers)
Date: 2011-11-03
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-hrm, nep-lab and nep-neu
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Persistent link: https://EconPapers.repec.org/RePEc:jrp:jrpwrp:2011-050

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