Incentives, Complexity, and Motivations in Experiments
47 Pages Posted: 5 Jul 2006
Date Written: June 24, 2006
We compare three motivation procedures in a voting experiment: 1) subjects paid a flat fee for participating, 2) subjects paid according to choices as is typical in a political economy experiment, and 3) subjects paid double the typical amount. We also vary complexity of the voting game. Financial incentives significantly increase the probability that subjects choose Bayesian-Nash predicted strategies. In the simpler game the typical financial incentive is sufficient, higher payments have no effect. But in the complex game, increasing financial incentives beyond the typical level is consequential. Further, repetition interacts with typical financial incentives in the complex game to increase the likelihood of Bayesian-Nash strategies. The evidence suggests that financial incentives increase subjects' cognitive attention to experimental tasks as individuals would be in comparable observational settings, which enhances theory evaluation in experiments and the external validity of the results.
Keywords: financial incentives, motivations, experiments
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