Recent studies, mostly from prosocial settings, suggest that monetary rewards may crowd out effort exertion by economic agents. We design a field experiment with data entry workers to investigate the extent of such crowding-out effects in a labor market. Using simple variations in the job description of a task, we induce a natural work setting under the work frame and emphasize social preference under the social frame. We find that crowding out of labor participation critically depends on framing—whereas small monetary rewards reduce the participation rate under the social frame, the participation rate is nondecreasing in the wage rate under the work frame. Moreover, among the workers who participate in the task, those who receive a positive wage perform a considerably higher amount of work than those who are paid zero wage under either frame. Thus, there is weak evidence of crowding out only when the task is explicitly given a prosocial flavor and not under a regular work setting. Furthermore, emphasizing social preference in the labor market in such a way reduces the overall labor supply and seems to have an adverse effect on the quality of work. Data, as supplemental material, are available at http://dx.doi.org/10.1287/mnsc.2013.1807 . This paper was accepted by John List, behavioral economics.

This paper experimentally investigates preference towards different methods of control in risk taking. Participants are asked to choose between different ways for choosing which numbers to bet on for a gamble. They can choose the numbers themselves (control), let the experimenter choose (no control), or randomize. It is found that in addition to the more conventional preference for control, some participants prefer not to control, or randomization. These preferences are robust as participants are willing to pay a small amount of money to implement their preferred method. Most of the participants believe that the winning probability under different methods is the same. Thus, their preferences are not driven by bias in probability belief such as those induced by illusion of control. Participants tend to invest less in the risky gamble when they are not offered their preferred method.

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