Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/304453 
Year of Publication: 
2024
Series/Report no.: 
Discussion Papers of the Max Planck Institute for Research on Collective Goods No. 2024/13
Publisher: 
Max Planck Institute for Research on Collective Goods, Bonn
Abstract: 
Incentives are supposed to increase effort, yet individuals react differently to incentives. We examine this heterogeneity by investigating how personal characteristics, preferences, and socio-economic background relate to incentives and performance in a real effort task. We analyze the performance of 1,933 high-school students under a Fixed, Variable, or Tournament payment. Productivity and beliefs about relative performance, but hardly any personal characteristics, play a decisive role for performance when payment schemes are exogenously imposed. Only when given the choice to select the payment scheme, personality traits, economic preferences and socio-economic background matter. Algorithmic assignment of payment schemes could improve performance, earnings, and utility, as we show.
Subjects: 
Effort
productivity
incentives
personality traits
preferences
socio-economic background
ability
heterogeneity
sorting
algorithm
lab-in-the-field experiment
JEL: 
C93
D91
J24
J41
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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