Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/123172 
Year of Publication: 
2015
Series/Report no.: 
CESifo Working Paper No. 5542
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
In a tedious real effort task, subjects know that their piece rate is either low or ten times higher. When subjects are informed about their piece rate realization, they adapt their performance. One third of subjects nevertheless forego this instrumental information when given the choice - and perform stunningly well. Agents who are uninformed regarding their piece rate tend to outperform all others, even those who know that their piece rate is high. This also holds for enforced instead of self-selected information avoidance. All our findings can be captured by a model of optimally distorted expectations following Brunnermeier and Parker (2005).
Subjects: 
optimal expectations
belief design
performance
real effort task
coarse incentive structures
workplace incentives
JEL: 
D83
D84
J31
M52
Document Type: 
Working Paper
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