One Size Fits All? The Interplay of Incentives, Effort Provision, and Personality

Zvonimir Bašić (), Stefania Bortolotti, Daniel Salicath, Stefan Schmidt, Sebastian Schneider and Matthias Sutter
Additional contact information
Zvonimir Bašić: University of Glasgow
Daniel Salicath: NAV Norwegian Labour and Welfare Administration
Stefan Schmidt: Max Planck Institute for Research on Collective Goods

No 17287, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Incentives are supposed to increase effort, yet individuals react differently to incentives. We examine this heterogeneity by investigating how personal characteristics, preferences, and socio-economic background relate to incentives and performance in a real effort task. We analyze the performance of 1,933 high-school students under a Fixed, Variable, or Tournament payment. Productivity and beliefs about relative performance, but hardly any personal characteristics, play a decisive role for performance when payment schemes are exogenously imposed. Only when given the choice to select the payment scheme, personality traits, economic preferences and socioeconomic background matter. Algorithmic assignment of payment schemes could improve performance, earnings, and utility, as we show.

Keywords: effort; productivity; incentives; personality traits; preferences; socio-economic background; ability; heterogeneity; sorting; algorithm; lab-in-the-field experiment (search for similar items in EconPapers)
JEL-codes: C93 D91 J24 J41 (search for similar items in EconPapers)
Pages: 89 pages
Date: 2024-09
New Economics Papers: this item is included in nep-cbe, nep-eff, nep-exp, nep-hrm, nep-ipr, nep-lma and nep-upt
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Working Paper: One size fits all? The interplay of incentives, effort provision, and personality (2024)
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