Recently, researchers have begun using online labor markets to recruit participants for experimental studies examining the judgments and decisions of nonprofessional investors. This study investigates the quality and generalizability of data collected from these sources by replicating an experimental task from Elliott, Hodge, Kennedy, and Pronk (2007) using nonprofessional investor participants from two popular online labor markets—Amazon's Mechanical Turk (MTurk) and Qualtrics Online Sample (Qualtrics). Compared to Qualtrics participants, we find that MTurk participants pay greater attention to the experimental materials and better acquire and recall information. Further, the MTurk sample more closely replicates EHKP's investment club member results on measures of information integration than does the Qualtrics sample. These results provide some evidence that many interesting research questions can be satisfactorily answered using nonprofessional investor participants from MTurk. We believe further investigation is needed before Qualtrics can be endorsed as a high-quality source of nonprofessional investor participants.
Incentive contracts are among the most prescribed means for alleviating agency problems. Accordingly, understanding when and why certain types of incentive contracts are effective is of crucial importance to organizations. Prior research documents that while employees generally prefer to work under contracts that include bonuses, employees exert more effort under economically equivalent penalty contracts. One reason for this is that penalties cause employees to experience greater expected disappointment than do bonuses. This study extends prior research in this area by documenting that external locus of control (ELOC), an individual characteristic, helps explain why employees respond to incentive contracts. We predict and find that, compared to individuals with higher ELOC, individuals with lower ELOC are less susceptible to contract frame-induced differences in expected disappointment and are thus not as motivated by penalty contracts compared to bonus contracts. This finding extends theory on contract framing and has important implications for how organizations implement incentive contracts in practice.
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