Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/161169
Authors: 
Goerg, Sebastian J.
Kube, Sebastian
Radbruch, Jonas
Year of Publication: 
2017
Series/Report no.: 
IZA Discussion Papers 10546
Abstract: 
Agents' decisions to exert effort depends on the provided incentives as well as the potential costs for doing so. So far most of the attention has been on the incentive side. However, our lab experiments underline that both the incentive and cost side can be used separately to shape work performance. In our experiment, subjects work on a real-effort task. Between treatments, we vary the incentive scheme used for compensating workers. Additionally, by varying the available outside options, we explore the role of implicit costs of effort in determining workers' performance. We observe that incentive contracts and implicit costs interact in a non-trivial manner. Performance reacts significantly to changes in implicit effort costs under low-powered piece-rate and target-based bonus contracts, but not under a high piece rate contract. In addition, comparisons between the incentive schemes depend crucially on the implicit costs.
Subjects: 
workers' performance
work environments
implicit cost
opportunity costs
incentive schemes
JEL: 
C91
D01
D03
D24
J22
J24
J33
L23
M52
Document Type: 
Working Paper

Files in This Item:
File
Size
694.36 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.