New Economics Papers
on Experimental Economics
Issue of 2012‒11‒17
twenty-one papers chosen by



  1. Cognitive Resource Depletion, Choice Consistency, and Risk Preferences By Marco Castillo; David L. Dickinson; Ragan Petrie
  2. An experimental investigation of auctions and bargaining in procurement By Shachat, Jason; Tan, Lijia
  3. Social preferences in the online laboratory : A randomized experiment By Jérôme Hergueux; Nicolas Jacquemet
  4. Risk, Entitlements and Fairness Bias: Explaining Preferences for Redistribution in Multi-person Setting By Mitesh Kataria; Natalia Montinari
  5. The Role of Information in Deterring Discrimination: A New Experimental Evidence of Statistical Discrimination By David Masclet; Emmanuel Peterle; Sophie Larribeau
  6. Security of property as a public good: Institutions, socio-political environment and experimental behavior in five countries By Francisco Campos-Ortiz; Louis Putterman; T.K. Ahn; Loukas Balafoutas; Mongoljin Batsaikhan; Matthias Sutter
  7. Who are the Voluntary Leaders? Experimental Evidence from a Sequential Contribution Game By Raphaële Préget; Phu Nguyen-Van; Marc Willinger
  8. Learning through Noticing: Theory and Experimental Evidence in Farming By Hanna, Rema; Mullainathan, Sendhil; Schwartzstein, Joshua
  9. Noblesse Oblige? Moral Identity and Prosocial Behavior in the Face of Selfishness By Dessi, Roberta; Monin, Benoît
  10. Allotment In First-Price Auctions: An Experimental Investigation. By Luca Corazzini; Stefano Galavotti; Rupert Sausgruber; Paola Valbonesi
  11. Are Ballot Initiative Outcomes Influenced by the Campaigns of Independent Groups? A Precinct-Randomized Field Experiment By Rogers, Todd; Middleton, Joel A.
  12. On the Nature of Reciprocity: Evidence from the Ultimatum Reciprocity Measure By Andreas Nicklisch; Irenaeus Wolff
  13. Multi-unit common value auctions: an experimental comparison between the static and the dynamic uniform auction By Ahlberg, Joakim
  14. Price as a signal of product quality: Some experimental evidence By Giovanni Mastrobuoni; Franco Peracchi; Aleksey Tetenov
  15. Multi-unit common value auctions: a laboratory experiment with three sealed-bid mechanisms By Ahlberg , Joakim
  16. Fight or freeze? Individual differences in investors' motivational systems and trading in experimental asset markets By Katrin Muehlfeld; Utz Weitzel; Arjen van Witteloostuijn
  17. Card Games and Financial Crises By Leonardo Becchetti; Maurizio Fiaschetti; Giancarlo Marini
  18. How Long Do Treatment Effects Last? Persistence and Durability of a Descriptive Norms Intervention's Effect on Energy Conservation By Allcott, Hunt; Rogers, Todd
  19. Competitive incentives: working harder or working smarter? By Anat Bracha; Chaim Fershtman
  20. Trust and Cheating By Butler, Jeff; Giuliano, Paola; Guiso, Luigi
  21. Goal Setting and Monetary Incentives: When Large Stakes Are Not Enough By Joaquín Gómez-Miñambres; Brice Corgnet; Roberto Hernán González

  1. By: Marco Castillo; David L. Dickinson; Ragan Petrie
    Abstract: We investigate the consistency and stability of individual risk preferences by slightly manipulating the cognitive resources of subjects through sleepiness. Participants are recruited and randomly assigned to an experiment session at a preferred time of day relative to their diurnal preference (circadian matched) or at a non-preferred time of day (circadian mismatched). For the decision task, subjects and are asked to choose how much to allocate between two state-dependent assets (using the Choi et al., 2007, design). We have two main findings. First, the consistency of behavior for circadian matched and mismatched subjects is statistically the same. This is true whether it is (nonparametrically) defined as consistency with GARP, payoff dominance, expected utility, disappointment aversion or cumulative prospect theory. Second, while our cognitive resource manipulation yields no difference in consistency of behavior, it results in an increased tendency to take risk. Our experiment confirms theoretical predictions that preferences are consistent yet state-dependent. Key Words:
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:apl:wpaper:12-04&r=exp
  2. By: Shachat, Jason; Tan, Lijia
    Abstract: In reverse auctions, buyers often retain the right to bargain further concessions from the winner. The optimal form of such procurement is an English auction followed by an auctioneer's option to engage in ultimatum bargaining with the winner. We study behavior and performance in this procurement format using a laboratory experiment. Sellers closely follow the equilibrium strategy of exiting the auction at their costs and then accepting strictly profitable offers. Buyers generally exercise their option to bargain according to their equilibrium strategy, but their take-it-or-leave-it offers vary positively with auction prices when they should be invariant. We explain this deviation by modeling buyers' subjective posteriors regarding the winners' costs as distortions, calculated using a formulation of probability weighting, of the Bayesian posteriors. We show alternative models based upon risk aversion and anticipated regret can't explain these price dependencies.
    Keywords: Auction; Bargaining; Experiment; Subjective Posterior
    JEL: D03 C92 C34 D44
    Date: 2012–10–17
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:42409&r=exp
  3. By: Jérôme Hergueux (LaRGE - Laboratoire de Recherche en Gestion et Economie, Sciences Po - Sciences Po); Nicolas Jacquemet (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, BETA - Bureau d'économie théorique et appliquée - CNRS : UMR7522 - Université de Strasbourg - Université Nancy II, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne)
    Abstract: Internet is a very attractive technology for experiments implementation, both in order to reach more diverse and larger samples and as a field of economic research in its own right. This paper reports on an experiment performed both online and in the laboratory, designed so as to strengthen the internal validity of decisions elicited over the Internet. We use the same subject pool, the same monetary stakes and the same decision interface, and randomly assign two group of subjects between the Internet and a traditional University laboratory to compare behavior in a set of social preferences games. This comparison concludes in favor of the reliability of behaviors elicited through the Internet. Our behavioral results contradict the predictions of social distance theory, as we find that subjects allocated to the Internet treatment behave as if they were more altruistic, more trusting, more trustworthy and less risk averse than laboratory subjects. Those findings have practical importance for the growing community of researchers interested in using the Internet as a vehicle for social experiments and bear interesting methodological lessons for social scientists interested in using experiments to research the Internet as a field.
    Keywords: Social experiment, field experiment, internet, methodology, randomized assignment.
    Date: 2012–10
    URL: http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00748615&r=exp
  4. By: Mitesh Kataria (Max Planck Institute of Economics, Strategic Interaction Group, Jena); Natalia Montinari (Max Planck Institute of Economics, Strategic Interaction Group, Jena)
    Abstract: Researchers frequently studied the casual relationships of other-regarding preferences by applying experimental methods in bilateral settings (e.g., dictator game and ultimatum game). We use a framed experiment on taxes to study preferences for redistribution in a multi-person setting. We find presence of heterogeneous preferences with a substantial share of tax rate choices in line with both payoff maximization and other-regarding preferences. Notably, our data is not consistent with inequality aversion but points to other forms of other-regarding preferences, as fairness and altruism. By manipulating how subjects are assigned to a given level of pre-tax income, we vary the individual entitlements. We find a difference in the willingness to redistribute income when comparing the treatment where pre-tax income is assigned by relative performance in a production task (a general knowledge quiz) to the treatment where pre-tax income is assigned by luck. We do not find any significant difference in comparison to the intermediate treatment where pre-tax income is assigned by a combination of luck and performance. The perception of a "fair" tax is different depending on whether subjects' pre-tax income is below or above average, which is in line with a fairness bias. Finally, subjects not knowing whether their pre-tax income is below or above the average when choosing the tax rate behave as if they were more other-regarding.
    Keywords: Redistribution, Entitlements, Fairness Bias, Risk, Framed Tax Experiment
    JEL: D6 C9
    Date: 2012–11–12
    URL: http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2012-061&r=exp
  5. By: David Masclet (University of Rennes1 - CREM UMR CNRS 6211, France and CIRANO, Montréal, Canada); Emmanuel Peterle (University of Rennes 1 - CREM UMR CNRS 6211, France); Sophie Larribeau (University of Rennes 1 - CREM UMR CNRS 6211, France)
    Abstract: This paper investigates experimentally gender and race discrimination in hiring decisions through a simple controlled setting where employers can observe workers’ individual characteristics before recruiting them. In this paper, we explore whether discrimination, if any, is statistical or taste-based. For this purpose, we varied across our treatments the level of information available to the employer during the hiring stage regarding workers’ potential ability. When no relevant information on ability is provided, we observe both significant gender and race discrimination. The introduction of information on ability or competitiveness reduces discrimination significantly, suggesting that discrimination is mainly due to a lack of information rather than preferences. Our findings indicate however that the reduction in discrimination strongly depends on the nature of the additional information available.
    Keywords: real effort experiment; statistical discrimination; taste based discrimination; performance
    JEL: C90 C92 J15 J16
    Date: 2012–10
    URL: http://d.repec.org/n?u=RePEc:tut:cremwp:201238&r=exp
  6. By: Francisco Campos-Ortiz; Louis Putterman; T.K. Ahn; Loukas Balafoutas; Mongoljin Batsaikhan; Matthias Sutter
    Abstract: We study experimentally the protection of property in five widely distinct countries-Austria, Mexico, Mongolia, South Korea and the United States. Our main results are that the security of property varies with experimental institutions, and that our subject pools exhibit significantly different behaviors that correlate with country-level property security, trust and quality of government. Subjects from countries with higher levels of trust or perceptions of safety are more prone to abstain initially from theft and devote more resources to production, and subjects from countries with higher quality political institutions are more supportive of protecting property through compulsory taxation. This highlights the relevance of socio-political factors in determining countries' success in addressing collective action problems including safeguarding property rights.
    Keywords: Property Rights, Theft, Efficiency, Experiment, Socio-Political Factors
    JEL: C91 C92 D03 H41 P14
    Date: 2012–11
    URL: http://d.repec.org/n?u=RePEc:inn:wpaper:2012-26&r=exp
  7. By: Raphaële Préget; Phu Nguyen-Van; Marc Willinger
    Abstract: We show that the preference to act as a leader rather than as a follower is related to subjects’ behavioral type. We rely on the methodology proposed by Fischbacher et al. (2001) and Fischbacher and Gächter (2010) in order to identify subjects’ behavioral types. We then link the likelihood to act as a leader in a repeated public goods game to the elicited behavioral types. The leader in a group is defined as the subject who voluntarily decides in the first place about his contribution. The leader’s contribution is then reported publicly to the remaining group members who are requested to take their contribution decisions simultaneously. Our main findings are that leaders emerge in almost all rounds and that conditional cooperators are more likely to act as leaders compared to free riders. We also find that voluntary leaders, irrespective of their behavioral type, contribute more than the followers. However leadership does not prevent the decay that is commonly observed in linear public goods experiments.
    Date: 2012–11
    URL: http://d.repec.org/n?u=RePEc:lam:wpaper:12-34&r=exp
  8. By: Hanna, Rema (Harvard University); Mullainathan, Sendhil (Harvard University); Schwartzstein, Joshua (Dartmouth College)
    Abstract: Existing learning models attribute failures to learn to a lack of data. We model a different barrier. Given the large number of dimensions one could focus on when using a technology, people may fail to learn because they failed to notice important features of the data they possess. We conduct a field experiment with seaweed farmers to test a model of "learning through noticing." We find evidence of a failure to notice: On some dimensions, farmers do not even know the value of their own input. Interestingly, trials show that these dimensions are the ones that farmers fail to optimize. Furthermore, consistent with the model, we find that simply having access to the experimental data does not induce learning. Instead, farmers change behavior only when presented with summaries that highlight the overlooked dimensions. We also draw out the implications of learning through noticing for technology adoption, agricultural extension, and the meaning of human capital.
    Date: 2012–10
    URL: http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp12-044&r=exp
  9. By: Dessi, Roberta (IDEI, Toulouse School of Economics); Monin, Benoît (Stanford University)
    Abstract: What makes individuals conform or diverge after observing prosocial or selfish behavior by others? We study experimentally how social comparison (observing a peer’s behavior) interacts with identity motives for cooperation. Participants play two games. We increase the strength of the identity motive by inducing subjects in a treatment condition to infer their identity from behavior in the first game. Cooperators who observe a peer defect donate 28% more to their unknown partner in the second game in the treatment than in the control group. Our results are consistent with the predictions of Bénabou and Tirole (2011), and show that the "suckerto- saint effect" identified by Jordan and Monin (2008) can have important behavioral consequences.
    Keywords: ,
    JEL: A1 A12 D1 D3 D64 Z1
    Date: 2012–11
    URL: http://d.repec.org/n?u=RePEc:tse:wpaper:26503&r=exp
  10. By: Luca Corazzini (University of Padova); Stefano Galavotti (University of Padova); Rupert Sausgruber (University of Innsbruck); Paola Valbonesi (University of Padova)
    Abstract: We experimentally study the effects of allotment Ð the division of an item into several units Ð in independent private value auctions. In particular, we compare a single-item, first-price auction with two equivalent treatments with allotment: a two-unit discriminatory auction and a setting in which subjects participate in two identical and simultaneous first- price auctions, each involving a single unit. We find that allotment mitigates overbidding, with this effect being more pronounced in the discriminatory auction. In the allotment treatments, most bidders submit different bids for identical units (bid spreading). Across treatments, the discriminatory auction is the least efficient.
    Keywords: allotment, multi-unit auction, discriminatory auction, first price auction.
    JEL: H57 D44
    Date: 2012–10
    URL: http://d.repec.org/n?u=RePEc:pad:wpaper:0153&r=exp
  11. By: Rogers, Todd (Harvard University); Middleton, Joel A. (NYU)
    Abstract: Ballot initiatives are consequential and common, with total spending on initiative campaigns in the US rivaling that of Presidential campaigns. Observational studies using regression approaches on observational data have alternately found that initiative campaign spending cannot affect initiative outcomes, can increase the number of votes rejecting (but not approving) initiatives, or can affect outcomes in either direction. We report the first well-powered precinct-randomized field experiment to evaluate an initiative advocacy campaign. We find that campaigns can influence both rejection and approval of initiatives by changing how citizens vote, as opposed to by influencing turnout or ballot completion. Our experiment (involving around 18% of Oregon households in 2008) studied a statewide mail program conducted by a Political Action Committee. Results further suggest that two initiatives would have passed if not for the advocacy campaign to reject them. We discuss implications for theories about direct democracy, campaign finance, and campaign effects.
    Date: 2012–11
    URL: http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp12-049&r=exp
  12. By: Andreas Nicklisch; Irenaeus Wolff
    Abstract: We experimentally show that current models of reciprocity are incomplete in a systematic way using a new variant of the ultimatum game that provides second-movers with a marginal-cost-free punishment option. For a substantial proportion of the population, the degree of first-mover unkindness determines the severity of punishment actions even when marginal costs are absent. The proportion of these participants strongly depends on a treatment variation: higher fixed costs of punishment more frequently lead to extreme responses. The fractions of purely selfish and inequity-averse participants are small and stable. Among the variety of reciprocity models, only one accommodates (rather than predicts) parts of our findings. We discuss ways of incorporating our findings into the existing models.
    Keywords: Distributional fairness, experiments, intention-based fairness, reciprocity, ultimatum bargaining
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:twi:respas:0079&r=exp
  13. By: Ahlberg, Joakim (VTI)
    Abstract: It is still an open question whether the dynamic or the static format should be used in multi-unit settings, in a uniform price auction. The present study conducts an economic experiment in a common value environment, where it is found that it is more a question of whether the auctioneer wants to facilitate price discovery, and thereby lessen the otherwise pervasive overbidding, or if only the revenue is important. The experiment in the present paper provides evidence that the static format gives significantly greater revenue than the dynamic auction, in both small and large group sizes. But a higher revenue comes at a cost; half of the auctions in the static format yield negative profits to the bidders, the winner's curse is more severely widespread in the static auction, and only a minority of the bidders use the equilibrium bidding strategy.
    Keywords: Laboratory experiment; Multi-Unit auction; Common value auction
    JEL: C72 C91 D44
    Date: 2012–11–05
    URL: http://d.repec.org/n?u=RePEc:hhs:ctswps:2012_024&r=exp
  14. By: Giovanni Mastrobuoni (Collegio Carlo Alberto and CeRP); Franco Peracchi (Tor Vergata University and EIEF); Aleksey Tetenov (Collegio Carlo Alberto)
    Abstract: We separate the budgetary and non-budgetary effects of price on demand using choice data from wine tasting experiments in which consumers tasted wines of different quality accompanied by fictitious price information. The non-budgetary effect is present and nonlinear: it is strongly positive between 3 and 5 euro, and undetectable between 5 and 8 euro. We find a similar nonlinear price-quality relationship in a large sample of wine ratings from the same price segment, supporting the hypothesis that consumer behavior in the experiment is consistent with rationally using prices as signals of quality. Price signals also have greater importance for inexperienced (young) consumers.
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:eie:wpaper:1214&r=exp
  15. By: Ahlberg , Joakim (VTI)
    Abstract: This study addresses a discrete common value environment with independent (one-dimensional) private signals, where the seller offers two identical units and the buyers have (flat) demand for both. Each session is conducted with 2, 3 or 4 buyers. Three auction formats are used: the discriminatory, uniform and Vickrey auctions which are all subjected to a variation in the number of bidders and to repeating bid rounds on each subject. The main findings are that there are no significant differences between the uniform and the discriminatory auction in collecting revenue, while the Vickrey auction comes out as inferior. More bidders in the auction result in a greater revenue and level out the performance across the mechanisms. Demand reduction is visible in the experiment, but it is not as prominent as anticipated. Moreover, subjects come closer to equilibrium play over time. Finally, the winner's curse is less severe than what is reported for inexperienced bidders in other studies.
    Keywords: Laboratory experiment; Multi-unit auction; Common value auction
    JEL: C72 C91 D44
    Date: 2012–11–05
    URL: http://d.repec.org/n?u=RePEc:hhs:ctswps:2012_023&r=exp
  16. By: Katrin Muehlfeld; Utz Weitzel; Arjen van Witteloostuijn
    Abstract: We analyze investors' trading behavior, particularly their coping with fundamental shocks in asset value, depending on individual differences in the sensitivity of two basic neurophysiological systems-the Behavioral Approach System (BAS), the 'driving force' of human behavior, and the Behavioral Inhibition System (BIS), its 'braking system'. By analyzing 15 independent experimental asset markets with a total of 171 participants, we find that differences in BAS and BIS sensitivity affect trading in both 'normal' and shocktrading environments: under normal trading conditions, individuals with a more sensitive BAS are more active traders, prefer riskier portfolios, and generate higher individual overall profits. High BIS subjects generate lower scalping and overall profits. Fundamental shocks generally reinforce the preference of high BAS investors for riskier portfolios, while positive shocks 'unfreeze' high BIS investors: they trade more frequently and generate higher profits. At the market level, normal trading in markets with a high BIS median is associated with lower volatility, compared to low BIS median markets, while greater concentration of traders' BAS scores around the mean is associated with better efficiency and liquidity, compared to markets with lower BAS kurtosis. In high BIS median markets, positive shocks lead to improved efficiency, lower bid-ask spread, and lower volatility. We observe no significant differences in market-level reactions to negative shocks.
    Keywords: Individual decision making; Investment decisions; Behavioral Approach System/Behavioral Inhibition System; Experimental asset markets; Fundamental shocks.
    JEL: C91 G11 D03 D81
    Date: 2012–11
    URL: http://d.repec.org/n?u=RePEc:use:tkiwps:1218&r=exp
  17. By: Leonardo Becchetti (Department of Economics and Law, University of Rome "Tor Vergata"); Maurizio Fiaschetti (Department of Economics and Law, University of Rome "Tor Vergata"); Giancarlo Marini (Department of Economics and Law, University of Rome "Tor Vergata")
    Abstract: There may be a nexus between card games and financial markets. Akerlof and Shiller (2010) wonder whether the decline in the number of bridge players and the growth in the number of poker players may have led to the current bad financial traders’ practices which are responsible for the global financial crisis. The reason is that bridge is a cooperative game generally played without monetary payoffs, while poker is an individualistic game with monetary payoffs. We simulate trust and dictator game experiments on a large sample of affiliated bridge and poker players. We find that bridge players make more polarized choices and send significantly more than poker players as trustors, a result which is reinforced when corrected for risk aversion and dictator giving. Overall, our findings do not reject the hypothesis that bridge practice is associated with a relatively higher disposition to team reasoning and strategic altruism.
    Keywords: trust games, financial crisis, poker , bridge
    JEL: C72 C91 A13
    Date: 2012–11–09
    URL: http://d.repec.org/n?u=RePEc:rtv:ceisrp:256&r=exp
  18. By: Allcott, Hunt (NYU); Rogers, Todd (Harvard University)
    Abstract: Behavioral decision research has profoundly changed our understanding of decision-making. Recent research has begun to explore how behavioral insights can influence behavior in the world, at scale. This work often involves field experiments studying outcomes over short time windows. We study a descriptive social norms intervention's impact on household energy usage continuously over 39 to 49 months. Our two field experiments (N=155,000 households) each have three conditions: untreated control, continued treatment, and treatment that is subsequently discontinued. We find that continued treatment reduces energy usage over the entire period ("durability"). Further, after treatment is discontinued, a sizable energy use reduction persists ("persistence"). Finally, continued treatment generates a greater impact over time than discontinued treatment, showing that continued treatment exerts incremental influence on behavior over and above persistence. We discuss implications, describe how long-term persistence can occur, and argue that future behavioral decision research should address long-term effects of interventions.
    Date: 2012–10
    URL: http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp12-045&r=exp
  19. By: Anat Bracha; Chaim Fershtman
    Abstract: Almost all jobs require a combination of cognitive effort and labor effort. This paper focuses on the effect that competitive incentive schemes have on the chosen combination of these two types of efforts. We use an experimental approach to show that competitive incentives may induce agents to work harder but not necessarily smarter. This effect was stronger for women.
    Keywords: Competition
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:fip:fedbwp:12-12&r=exp
  20. By: Butler, Jeff; Giuliano, Paola; Guiso, Luigi
    Abstract: When we take a cab we may feel cheated if the driver takes an unnecessarily long route despite the lack of a contract or promise to take the shortest possible path. Is our decision to take the cab affected by our belief that we may end up feeling cheated? Is the behavior of the driver affected by his beliefs about what we consider cheating? We address these questions in the context of a trust game by asking participants directly about their notions of cheating. We find that: i) both parties to a trust exchange have implicit notions of what constitutes cheating even in a context without promises or messages; ii) these notions are not unique - the vast majority of senders would feel cheated by a negative return on their trust/investment, whereas a sizable minority defines cheating according to an equal split rule; iii) these implicit notions affect the behavior of both sides to the exchange in terms of whether to trust or cheat and to what extent. Finally, we show that individuals’ notions of what constitutes cheating can be traced back to two classes of values instilled by parents: cooperative and competitive. The first class of values tends to soften the notion while the other tightens it.
    Keywords: cheating; culture; social norms; Trust; trustworthiness
    JEL: A1 A12 D1 O15 Z1
    Date: 2012–11
    URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:9202&r=exp
  21. By: Joaquín Gómez-Miñambres (Economic Science Institute, Chapman University); Brice Corgnet (Argyros School of Business and Economics, Chapman University); Roberto Hernán González (Universidad de Granada, Department of Economic Theory and Economic History)
    Abstract: The aim of this paper is to test the effectiveness of wage-irrelevant goal setting policies in a laboratory environment. In our design, managers can assign a goal to their workers by setting a certain level of performance on the work task. To establish our theoretical conjectures we develop a model where assigned goals act as reference points to workers’ intrinsic motivation, creating a sense of gain when attained and a sense of loss when not attained. Consistent with our theoretical framework, we find evidence that managers set goals that are challenging but attainable for an average-ability worker. Workers respond to these goals by increasing effort, performance and by decreasing on-the-job leisure activities with respect to the no-goal setting baseline. We study the interaction between goal setting and monetary rewards by considering different values for the monetary incentives involved in completing the task. Interestingly, we find that goal setting is especially effective when monetary incentives are strong. These results suggest that goal setting may foster workers’ intrinsic motivation and increase their level of performance beyond what is achieved using solely monetary incentives.
    Keywords: Intrinsic motivation, incentives, goal-setting, reference dependent preferences, virtual organizations.
    JEL: C92 D23 M54
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:chu:wpaper:12-24&r=exp

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