Does a Short-Term Increase in Incentives Boost Performance?

Rationality & Competition Discussion Paper No. 60

15 Pages Posted: 8 Jan 2018

See all articles by Vera Angelova

Vera Angelova

Technische Universität Berlin (TU Berlin)

Thomas Giebe

Linnaeus University - Department of Economics and Statistics

Radosveta Ivanova-Stenzel

Technische Universität Berlin (TU Berlin)

Date Written: December 28, 2017

Abstract

If agents are exposed to continual competitive pressure, how does a short-term variation of the severity of the competition affect agents’ performance? In a real-effort laboratory experiment, we study a one-time increase in incentives in a sequence of equally incentivized contests. Our results suggest that a short-term increase in incentives induces a behavioral response but does not boost total performance.

Keywords: contest, tournament, real-effort, experiment, contract theory, forward-looking

JEL Classification: C91, D91, J22, J33, L2, M5

Suggested Citation

Angelova, Vera and Giebe, Thomas and Ivanova-Stenzel, Radosveta, Does a Short-Term Increase in Incentives Boost Performance? (December 28, 2017). Rationality & Competition Discussion Paper No. 60. Available at SSRN: https://ssrn.com/abstract=3096382 or http://dx.doi.org/10.2139/ssrn.3096382

Vera Angelova

Technische Universität Berlin (TU Berlin)

Straße des 17
Juni 135
Berlin, 10623
Germany

Thomas Giebe (Contact Author)

Linnaeus University - Department of Economics and Statistics ( email )

Växjö, 351 06
Sweden

Radosveta Ivanova-Stenzel

Technische Universität Berlin (TU Berlin) ( email )

Straße des 17. Juni 135
Berlin, 10623
Germany

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