Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/129826 
Year of Publication: 
2016
Series/Report no.: 
CeDEx Discussion Paper Series No. 2016-01
Publisher: 
The University of Nottingham, Centre for Decision Research and Experimental Economics (CeDEx), Nottingham
Abstract: 
We study the relative effectiveness of contracts that are framed either in terms of bonuses or penalties. In one set of treatments subjects know at the time of effort provision whether they have achieved the bonus / avoided the penalty. In another set of treatments subjects only learn the success of their performance at the end of the task. We fail to observe a contract framing effect in either condition: effort provision is statistically indistinguishable under bonus and penalty contracts. We discuss possible reasons for this null result.
Subjects: 
contract framing
bonus
penalty
fine
loss aversion
JEL: 
C9
D03
J24
Document Type: 
Working Paper

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