Incentivizing Quantity and Quality of Output: An Experimental Investigation of the Quantity-Quality Trade-off

Jared Rubin, Anya Samek and Roman Sheremeta

MPRA Paper from University Library of Munich, Germany

Abstract: Firms face an optimization problem that requires a maximal quantity output given a quality constraint. How firms should incentivize quantity and quality to meet these dual goals remains an open question, potentially due to limitations of field data. We provide a theoretical model and conduct an experiment in which participants are paid for both quantity and quality of a real effort task. Consistent with the theoretical predictions, higher quality incentives encourage participants to shift their attention from quantity to quality, and higher quality incentives reduce inefficient decision-making. We also observe behavioral components in responsiveness to the quality incentive.

Keywords: quantity; quality; experiment; incentives; real effort; loss aversion (search for similar items in EconPapers)
JEL-codes: D24 J24 J31 J41 (search for similar items in EconPapers)
Date: 2016-01-27
New Economics Papers: this item is included in nep-exp, nep-hrm and nep-lma
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https://mpra.ub.uni-muenchen.de/69080/1/MPRA_paper_69080.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/74806/9/MPRA_paper_74806.pdf revised version (application/pdf)

Related works:
Working Paper: Incentivizing Quantity and Quality of Output: An Experimental Investigation of the Quantity-Quality Trade-off (2016)
Working Paper: Incentivizing Quantity and Quality of Output: An Experimental Investigation of The Quantity-Quality Trade-Off (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:69080

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