Self-selection and the Power of Incentive Schemes: An Experimental Study

Jana Vyrastekova (1) , Sander Onderstal (2) , Pierre Koning (3)

1 Nijmegen School of Management
2 UvA - University of Amsterdam [Amsterdam] = Universiteit van Amsterdam
3 CPB Netherlands Bureau for Economic Policy Analysis

We examine how self-selection of workers depends on the power of incentive schemes and how it affects team performance if the power of the incentive schemes is increased. In a laboratory experiment, we let subjects choose between (low-powered) team incentives and (high-powered) individual incentives. We observe that subjects exhibiting high trust or reciprocity in the trust game are more likely to choose team incentives. When exposed to individual incentives, subjects who chose team incentives perform worse if both the unobservable interdependency between their effort and their incentive to cooperate under team incentives are high.

Mots clés: Social Sciences & Humanities

Domaines: Économie et finance quantitative [q-fin]

Jana Vyrastekova, Sander Onderstal, Pierre Koning. Self-selection and the Power of Incentive Schemes: An Experimental Study. Applied Economics, 2011, pp.1. ⟨10.1080/00036846.2011.587787⟩. ⟨hal-00716630⟩