Effects of incentive framing on performance and effort: evidence from a medically framed experiment

Mylène Lagarde () and Duane Blaauw
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Mylène Lagarde: London School of Economics
Duane Blaauw: University of Witwatersrand

Journal of the Economic Science Association, 2021, vol. 7, issue 1, No 3, 33-48

Abstract: Abstract We study the effects on performance of incentives framed as gains or losses, as well as the effort channels through which individuals increase performance. We also explore potential spill-over effects on a non-incentivised activity. Subjects participated in a medically framed real-effort task under one of the three contracts, varying the type of performance incentive received: (1) no incentive; (2) incentive framed as a gain; or (3) incentive framed as a loss. We find that performance improved similarly with incentives framed as losses or gains. However, individuals increase performance differently under the two frames: potential losses increase participants’ performance through a greater attention (fewer mistakes), while bonuses increase the time spent on the rewarded activity. There is no spill-over effect, either negative or positive, on the non-incentivised activity. We discuss the meaning and implications of our results for the design of performance contracts.

Keywords: Penalties; Rewards; Laboratory experiment; Prosocial motivation; Intrinsic motivation; C91; D64; I11 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s40881-021-00100-0

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