Financial Incentives and Cognitive Abilities: Evidence from a Forecasting Task with Varying Cognitive Load

Ondrej Rydval

No 2007-040, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: I examine how financial incentives interact with intrinsic motivation and especially cognitive abilities in explaining heterogeneity in performance. Using a forecasting task with varying cognitive load, I show that the effectiveness of high-powered financial incentives as a stimulator of economic performance can be moderated by cognitive abilities in a causal fashion. Identifying the causality of cognitive abilities is a prerequisite for studying their interaction with financial and intrinsic incentives in a unifying framework, with implications for the design of efficient incentive schemes.

Keywords: Financial incentives; Cognitive ability; Heterogeneity; Performance; Experiment (search for similar items in EconPapers)
JEL-codes: C81 C91 D83 (search for similar items in EconPapers)
Date: 2007-07-18
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-for
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:jrp:jrpwrp:2007-040

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