Does a Short-Term Increase in Incentives Boost Performance?
Rationality & Competition Discussion Paper No. 60
15 Pages Posted: 8 Jan 2018
Date Written: December 28, 2017
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: Suggested Citation