Arbeitspapier
Incentive Complexity, Bounded Rationality and Effort Provision
Using field and laboratory experiments, we demonstrate that the complexity of incentive schemes and worker bounded rationality can affect effort provision, by shrouding attributes of the incentives. In our setting, complexity leads workers to over-provide effort relative to a fully rational benchmark, and improves efficiency. We identify contract features, and facets of worker cognitive ability, that matter for shrouding. We find that even relatively small degrees of shrouding can cause large shifts in behavior. Our results illustrate important implications of complexity for designing and regulating workplace incentive contracts.
- Sprache
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Englisch
- Erschienen in
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Series: IZA Discussion Papers ; No. 16284
- Klassifikation
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Wirtschaft
- Thema
-
complexity
bounded rationality
shrouded attribute
ratchet effect
dynamic incentives
field experiments
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Abeler, Johannes
Huffman, David B.
Raymond, Collin
- Ereignis
-
Veröffentlichung
- (wer)
-
Institute of Labor Economics (IZA)
- (wo)
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Bonn
- (wann)
-
2023
- Handle
- Letzte Aktualisierung
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10.03.2025, 11:44 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Abeler, Johannes
- Huffman, David B.
- Raymond, Collin
- Institute of Labor Economics (IZA)
Entstanden
- 2023