More effort with less pay: On information avoidance, belief design and performance

Steffen Huck, Nora Szech and Lukas M. Wenner

Discussion Papers, Research Unit: Economics of Change from WZB Berlin Social Science Center

Abstract: In a tedious real effort task, subjects know that their piece rate is either low or ten times higher. When subjects are informed about their piece rate realization, they adapt their performance. One third of subjects nevertheless forego this instrumental information when given the choice - and perform stunningly well. Agents who are uninformed regarding their piece rate tend to outperform all others, even those who know that their piece rate is high. This also holds for enforced instead of self-selected information avoidance. All our findings can be captured by a model of optimally distorted expectations following Brunnermeier and Parker (2005).

Keywords: Optimal Expectations; Belief Design; Performance; Real Effort Task; Coarse Incentive Structures; Workplace Incentives (search for similar items in EconPapers)
JEL-codes: D83 D84 J31 M52 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-exp, nep-hrm and nep-lma
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Citations: View citations in EconPapers (10)

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Related works:
Working Paper: More Effort with Less Pay: On Information Avoidance, Belief Design, and Performance (2016)
Working Paper: More Effort with Less Pay: On Information Avoidance, Belief Design and Performance (2015)
Working Paper: More effort with less pay: On information avoidance, belief design and performance (2015)
Working Paper: More effort with less pay: On information avoidance, belief design and performance (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:wzbeoc:spii2015304r

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