Leaving Money on the Table

Mackenzie Alston (), Tatyana Deryugina () and Olga Shurchkov ()
Additional contact information
Mackenzie Alston: University of Illinois at Urbana-Champaign
Tatyana Deryugina: University of Illinois at Urbana-Champaign
Olga Shurchkov: Wellesley College

No 17812, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: There is much disagreement about the extent to which financial incentives motivate study participants. We elicit preferences for being paid for completing a survey, including a one-in-twenty chance of winning a $100 electronic gift card, a guaranteed electronic gift card with the same expected value, and an option to refuse payment. More than twice as many participants chose the lottery as chose the guaranteed payment. Given that most people are risk averse, this pattern suggests that factors beyond risk preferences—such as hassle costs—influenced their decision-making. Almost 20 percent of participants actively refused payment, demonstrating low monetary motivation. We find both systematic and unobserved heterogeneity in the characteristics of who turned down payment. The propensity to refuse payment is more than four times as large among individuals 50 and older compared to younger individuals, suggesting a tradeoff between financially motivating participants and obtaining a representative sample. Overall, our results suggest that modest electronic gift card payments violate key requirements of Vernon Smith’s induced value theory.

Keywords: induced value theory; motivation; incentives (search for similar items in EconPapers)
JEL-codes: C83 C90 (search for similar items in EconPapers)
Date: 2025-03
References: Add references at CitEc
Citations:

Downloads: (external link)
https://docs.iza.org/dp17812.pdf (application/pdf)

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:iza:izadps:dp17812

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().