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http://hdl.handle.net/10419/25605
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| Title: | | The interaction between financial incentives and task-specific cognitive capital: more evidence in support of Camerer and Hogarth (1999)  |
| Authors: | | Rydval, Ondřej |
| Issue Date: | | 2007 |
| Series/Report no.: | | Jena economic research papers 2007,039 |
| Abstract: | | This paper extends existing evidence on the interaction between financial incentives and cognitive capital. I focus on the impact of task-specific cognitive capital, the role of which is central to the capital-labor-production framework of Camerer and Hogarth (1999) and has long been studied in cognitive science and behavioral decision research. Using a task situated in an accounting setting, I show that both financial incentives and task-specific cognitive capital, and especially their interaction, matter for performance. In particular, the effect of task-specific cognitive capital on performance is stronger under performance-based financial incentives as compared to flat-rate incentives. The interaction effect arises because performance-based financial incentives lead to better performance only for individuals with more task-specific cognitive capital. I draw implications for compensation practices in experiments as well as work settings. |
| Subjects: | | Financial incentives Cognitive abilities Experiments Field experiments |
| JEL: | | C81 C91 C93 D83 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Jena Economic Research Papers, MPI für Ökonomik
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