Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/145023 
Year of Publication: 
2016
Series/Report no.: 
CESifo Working Paper No. 5988
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Most large-scale economic experiments use a between-subjects random incentive system-BRIS-which selects a subset of the participants at random and offers real payment only to the selected participants. We evaluate the relative impact of nominal payoffs and the selection probability on the incentive effectiveness of BRIS. High nominal payoffs and a tiny but unknown selection probability induce the monetary incentives in a large-scale Internet treatment. Two laboratory treatments complement the Internet treatment, one with high nominal payoffs and a moderate selection probability and the other with moderate nominal payoffs and a high selection probability. For the majority of our participants nominal payoffs have a bigger impact on the incentive effectiveness of BRIS than the probability of payment and the latter hardly dilutes the effects of monetary incentives. Our results suggest that cost-effective BRIS consist of high nominal payoffs and a small selection probability.
Subjects: 
cost-effectiveness
random incentive system
large-scale experiments
risk aversion
decision error
JEL: 
C91
C93
D12
D81
Document Type: 
Working Paper
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