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Incentives to Persevere

Elif Incekara-Hafalir (), Grace HY Lee (), Audrey KL Siah () and Erte Xiao ()
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Elif Incekara-Hafalir: University of Technology Sydney
Grace HY Lee: Monash University (Malaysia)
Audrey KL Siah: Monash University (Malaysia)

No 2019/06, Working Paper Series from Economics Discipline Group, UTS Business School, University of Technology, Sydney

Abstract: Achieving success often requires persistent efforts. We study the effectiveness of two reward mechanisms, all-or-nothing and piece-rate, to incentivize full completion of repeated tasks over a period of time. Data from two randomized controlled trials show that the full completion rate under the all-or-nothing mechanism does not differ from that under the regular piece-rate mechanism. However, when given the choice between the all-or-nothing and piece-rate mechanisms in a third (self-select) treatment, a significant number of participants chose the all-or-nothing mechanism despite the risk. The overall full completion rate is significantly higher in the self select treatment than the piece-rate treatment. Our results highlight the importance of choice in incentivising persistent efforts.

Keywords: Perseverance; incentives; self-control; field experiments (search for similar items in EconPapers)
JEL-codes: C93 D91 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2019-06-04
New Economics Papers: this item is included in nep-des, nep-exp and nep-sea
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