Incentive systems in a real effort experiment

Abstract

In the reported experiment different payment schemes are examined on their incentive effects. Payment based on individual, team and relative performance are compared. Subjects conducted computerized tasks that required substantial effort. The results show that individual and team payment induced the same effort levels. In team production free-riding occurred, but it was compensated by many subjects providing more effort than in case of individual pay. Effort was higher, but more variable in tournaments, while in case of varying abilities workers with relatively low ability worked very hard and drove up effort of the others. Finally, attitudes towards work and other workers differed strongly between conditions.

Performance measurement, expectancy and agency theory: An experimental study

“…The external validity of the results would then be strongly in demand. van Dijk et al (2001), for instance, argue that there is a clear di¤erence between allocating budgets and allocation real e¤ort. They therefore use a real e¤ort experiment to evaluate di¤erent incentive systems.…”

“…In particular, we followed the real e¤ort setup of van Dijk et al (2001). Individual subjects had to divide their e¤ort over two di¤erent optimization tasks, viz.…”

“…Our design is inspired by the real e¤ort experiment of van Dijk et al (2001) and closely follows the example of the sales representative given above. Just as in the example we vary the distribution of the noise component while keeping everything else (e.g.…”

War and conflict in economics: Theories, applications, and recent trends

“…Most laboratory studies also find support for the main predictions of the theory, such as the incentive effect (Bull et al, 1987;Van Dijk et al, 2001), the size effect (Gneezy and Smorodinsky, 2006;Sheremeta, 2011;Morgan et al, 2012) and the discouragement effect (Davis and Reilly, 1998;Fonseca, 2009). However, experimental studies also uncovered a number of important phenomena which are not predicted by the theory.…”

Risk-sorting and preference for team piece rates

“…8 The setting provides an experimental environment that resembles real work (Van Dijk, Sonnemans, & van Winden, 2001;IvanovaStenzel & Kübler, 2011) and allows us to observe a sufficient degree of output heterogeneity.…”