Incentives, decision frames, and motivation crowding out -- an experimental investigation
By: by Bernd Irlenbusch, Dirk Sliwka.
Contributors: Sliwka, Dirk.
Series: Discussion paper ;; no. 1758; Discussion paper (Forschungsinstitut zur Zukunft der Arbeit : Online) ;; no. 1758
Publisher: IZA
Published: 2005
Place of publication: Bonn, Germany
Language: eng
Format: Electronic resource
Subjects: Incentives in industry.; Wages.; Piecework.
Description: "A simple principal agent problem is experimentally investigated in which a principal repeatedly sets a wage and an agent responds by choosing an effort level. The principal's payoff is determined by the agent's effort. In a first setting the principal can only set a fixed wage in each period. In a second setting the principal has the possibility to supplement the fixed wage with a piece rate. Surprisingly, efforts are lower in the case where piece rates can be paid. Furthermore, switching in the same treatment from a setting where piece rates are available to one where only fixed wages can be paid tends to lead to even lower effort levels. Based on our findings we suggest a new explanation for motivation crowding out by arguing that the use of piece rates considerably alters the principals' and agents' perception of the situation"--Forschungsinstitut zur Zukunft der Arbeit web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 9/28/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.