More effort with less pay: On information avoidance, optimistic beliefs, and performance

Steffen Huck, Nora Szech and Lukas M. Wenner

European Economic Review, 2025, vol. 174, issue C

Abstract: Neoclassical theory presumes that agents value instrumental information. In contrast, recent behavioral studies motivate and model information avoidance. We study preferences for and against instrumental information in a real-effort task varying information structures on performance pay. Our study offers three main results. First, we confirm that both, preferences for and against instrumental information, exist. Second, information avoiders outperform information receivers. This result holds independently of effects of self-selection. Third, our findings about information avoiders can be aligned with behavioral theories of optimistic belief design.

Keywords: Optimal expectations; Belief design; Real effort task; Coarse incentive structures; Workplace incentives (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0014292125000157
Full text for ScienceDirect subscribers only

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:eee:eecrev:v:174:y:2025:i:c:s0014292125000157

DOI: 10.1016/j.euroecorev.2025.104965

Access Statistics for this article

European Economic Review is currently edited by T.S. Eicher, A. Imrohoroglu, E. Leeper, J. Oechssler and M. Pesendorfer

More articles in European Economic Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().