DP13226 The Effect of Incentives in Non-Routine Analytical Team Tasks - Evidence from a Field Experiment

Author(s): Florian Englmaier, Stefan Grimm, David Schindler, Simeon Schudy
Publication Date: October 2018
Keyword(s): bonus, exploration, gain, incentives, loss, non-routine, team work
JEL(s): C92, C93, D03, J33, M52
Programme Areas: Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=13226

Despite the prevalence of non-routine analytical team tasks in modern economies, little is known about how incentives influence performance in these tasks. In a field experiment with more than 3000 participants, we document a positive effect of bonus incentives on the probability of completion of such a task. Bonus incentives increase performance due to the reward rather than the reference point (performance threshold) they provide. The framing of bonuses (as gains or losses) plays a minor role. Incentives improve performance also in an additional sample of presumably less motivated workers. However, incentives reduce these workers' willingness to "explore" original solutions.