Capital and Labor Effects in a Recall Task: More Evidence in Support of Camerer and Hogarth (1999)

Ondrej Rydval

CERGE-EI Working Papers from The Center for Economic Research and Graduate Education - Economics Institute, Prague

Abstract: This paper extends existing evidence on the interaction and relative productivity of cognitive effort and cognitive capital in an experimental environment. I focus on the impact of task-specific cognitive capital, which is central to the capital-labor argument of Camerer and Hogarth (1999) as well as related research in cognitive science and behavioral decision making. Using a memory recall task situated in an accounting setting, I show that the impact of taskspecific accounting knowledge on recall performance varies with the timing of the introduction of performance-contingent financial incentives. I further illustrate that subjects better endowed with task-specific accounting knowledge greater improve recall performance in response to the introduction of performance-contingent financial incentives. I draw implications for further research of the capital-labor-production framework and for compensation practices in experiments as well as work settings.

Keywords: Financial incentives; Cognitive abilities; Experiments; Field experiments. (search for similar items in EconPapers)
JEL-codes: C81 C91 C93 D83 (search for similar items in EconPapers)
Date: 2005-06
New Economics Papers: this item is included in nep-cbe and nep-exp
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Persistent link: https://EconPapers.repec.org/RePEc:cer:papers:wp264

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