Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/56844 
Year of Publication: 
2011
Series/Report no.: 
Jena Economic Research Papers No. 2011,050
Publisher: 
Friedrich Schiller University Jena and Max Planck Institute of Economics, Jena
Abstract: 
We extend evidence on the interaction between financial incentives and cognitive abilities by focusing on the effect of task-specific abilities. In a memory-intensive task situated in an accounting context, the effect of accounting education on performance is stronger under financial incentives as compared to flat rate pay. Subjects with more accounting education respond stronger to financial incentives. Hence using incentives efficiently may involve targeting them at high-ability individuals. More generally, taking into account the incentive-ability interaction seems important when interpreting observed behavior in cognitively demanding lab and field economic environments.
Subjects: 
financial incentives
cognitive ability
performance
experiment
JEL: 
C81
C91
C93
D83
Document Type: 
Working Paper

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