ICES Seminar in Experimental Economics and Game Theory

Incentives to Persevere

Friday, October 30, 2020 4:30 PM to 5:30 PM
Online Location, Zoom Meeting

The ICES Seminar in Experimental Economics and Game Theory of the Fall 2020 semester will feature:

Erte Xiao

Monash University

Incentives to Persevere 

 

Please contact ICES Office Manager (sbahabib@gmu.edu) for Zoom link.

 

Abstract

Achieving success often requires persistent effort. We study the effectiveness of two reward mechanisms, all-or-nothing and piece-rate, to incentivize full completion of repeated tasks over time. Our theoretical analysis shows that exogenously imposing the all-or-nothing mechanism can be ineffective due to the potential discouragement effect. In contrast, empowering individuals to choose between the two reward mechanisms can significantly improve the full completion rate. Data from a series of field experiments and follow up replications that involve more than 2000 participants provide robust evidence that the all-or-nothing mechanism is effective only when it is presented as an option. Our results highlight the importance of choice in incentivizing persistent effort.

 

For more information about the Seminar Series, please visit the Seminar Schedule homepage.