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Monetary and Social Incentives in Multi-Tasking: The Ranking Substitution Effect

Matthias Stefan (), Jürgen Huber (), Michael Kirchler (), Matthias Sutter () and Markus Walzl ()

Working Papers from Faculty of Economics and Statistics, University of Innsbruck

Abstract: Rankings are prevalent information and incentive tools in labor markets with strong competition for talent. In a dynamic model of multi-tasking and an accompanying experiment with financial professionals, we identify hidden ranking costs when performance in one task is incentivized and ranked while another prosocial task is not: (i) a ranking influences behavior if individuals lag behind: they spend more total effort and substitute effort in the prosocial task with effort in the ranked task; (ii) those ahead in the ranking spend less total effort and lower relative effort in the ranked task. Implications for incentive schemes are discussed.

Keywords: multi-tasking decision problem; rank incentives; framed field experiment; finance professionals (search for similar items in EconPapers)
JEL-codes: C93 D02 D91 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2020-06
New Economics Papers: this item is included in nep-exp, nep-gen, nep-hrm, nep-ore and nep-upt
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Handle: RePEc:inn:wpaper:2020-06