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

Mylène Lagarde and Duane Blaauw

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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 (search for similar items in EconPapers)
JEL-codes: C91 D64 I11 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2021-09-01
New Economics Papers: this item is included in nep-cta, nep-exp and nep-hrm
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Citations: View citations in EconPapers (1)

Published in Journal of the Economic Science Association, 1, September, 2021, 7(1), pp. 33 - 48. ISSN: 2199-6784

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:110864

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