The Effect of Incentives in Non-Routine Analytical Team Tasks
94 Pages Posted: 19 Apr 2018
Date Written: February 21, 2018
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 series of field experiments with more than 5,000 participants, we investigate how incentives alter behavior in teams working on such a task. We document a positive effect of bonus incentives on performance, even among strongly intrinsically motivated teams. Bonuses also transform team organization as they enhance teams’ demand for leadership. Exogenously increasing the demand for leadership establishes a causal link that explains a large part of the observed bonus-induced performance improvements.
Keywords: team work, bonus, incentives, loss, gain, non-routine, exploration
JEL Classification: C920, C930, J330, D030, M520
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