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Working Hard or Working Smart?

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  • Bracha, Anat
  • Fershtman, Chaim

Abstract

Almost all jobs require a combination of cognitive effort and labor effort. The focus of the paper is on the effect of different incentive schemes on the chosen combination of these types of efforts. We use an experimental approach to show that tournament incentives may induce agents to work harder but not necessarily smarter. This effect was stronger for women. We then ran a "managerial bonus" experiment in which a preassigned manager receives a bonus whenever the overall performance of his/her group is above a given threshold level. Although the bonus does not affect the participants' direct incentives, it induces participants to lower their cognitive effort and increase their labor effort.

Suggested Citation

  • Bracha, Anat & Fershtman, Chaim, 2018. "Working Hard or Working Smart?," Foerder Institute for Economic Research Working Papers 275740, Tel-Aviv University > Foerder Institute for Economic Research.
    • Handle: RePEc:ags:isfiwp:275740
    DOI: 10.22004/ag.econ.275740
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    References listed on IDEAS

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    4. Chaim Fershtman & Uri Gneezy, 2011. "The Tradeoff Between Performance And Quitting In High Power Tournaments," Journal of the European Economic Association, European Economic Association, vol. 9(2), pages 318-336, April.
    5. Rachel Croson & Uri Gneezy, 2009. "Gender Differences in Preferences," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 448-474, June.
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    7. Bruno S. Frey & Reto Jegen, 2001. "Motivation Crowding Theory," Journal of Economic Surveys, Wiley Blackwell, vol. 15(5), pages 589-611, December.
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    Keywords

    Financial Economics; Labor and Human Capital;

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