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
Englisch

Erschienen in
Series: IZA Discussion Papers ; No. 16284

Klassifikation
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)
Bonn
(wann)
2023

Handle
Letzte Aktualisierung
10.03.2025, 11:44 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Abeler, Johannes
  • Huffman, David B.
  • Raymond, Collin
  • Institute of Labor Economics (IZA)

Entstanden

  • 2023

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