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Age differences in the reaction to incentives – do older people avoid competition?

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  • Sproten, Alec N.
  • Schwieren, Christiane

Abstract

The “aging employee” has recently become a hot topic in many fields of behavioural research. With the aim to determine the effects of different incentive schemes (competition, social or increased monetary incentives) on performance of young and older subjects, we look at behaviour of a group of younger and older adults on a well-established real effort task. We show that older adults differ from younger adults in their performance in all conditions, but not in the improvement between conditions. The age difference in performance is however driven by women. While we replicate the gender difference in competitiveness found in the literature, we do not find a significant age difference in competitiveness. Social incentives have an at least as strong or even stronger effect on performance than increased monetary incentives. This effect is driven by men; women do not show an increase in performance with social incentives.

Suggested Citation

  • Sproten, Alec N. & Schwieren, Christiane, 2012. "Age differences in the reaction to incentives – do older people avoid competition?," Working Papers 0522, University of Heidelberg, Department of Economics.
    • Handle: RePEc:awi:wpaper:0522
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    References listed on IDEAS

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    1. Müller, Julia & Schwieren, Christiane, 2012. "Can personality explain what is underlying women’s unwillingness to compete?," Journal of Economic Psychology, Elsevier, vol. 33(3), pages 448-460.
    2. Muriel Niederle & Lise Vesterlund, 2007. "Do Women Shy Away From Competition? Do Men Compete Too Much?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(3), pages 1067-1101.
    3. Charness, Gary & Villeval, Marie Claire, 2007. "Cooperation, Competition, and Risk Attitudes: An Intergenerational Field and Laboratory Experiment," IZA Discussion Papers 2574, Institute of Labor Economics (IZA).
    4. Uri Gneezy & Aldo Rustichini, 2004. "Gender and Competition at a Young Age," American Economic Review, American Economic Association, vol. 94(2), pages 377-381, May.
    5. Anna Dreber & Emma Essen & Eva Ranehill, 2011. "Outrunning the gender gap—boys and girls compete equally," Experimental Economics, Springer;Economic Science Association, vol. 14(4), pages 567-582, November.
    6. Kovalchik, Stephanie & Camerer, Colin F. & Grether, David M. & Plott, Charles R. & Allman, John M., 2005. "Aging and decision making: a comparison between neurologically healthy elderly and young individuals," Journal of Economic Behavior & Organization, Elsevier, vol. 58(1), pages 79-94, September.
    7. Uri Gneezy & Kenneth L. Leonard & John A. List, 2009. "Gender Differences in Competition: Evidence From a Matrilineal and a Patriarchal Society," Econometrica, Econometric Society, vol. 77(5), pages 1637-1664, September.
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    Cited by:

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    2. Darwin Joseph R. & Palanisamy Chinnathambi Selvaraj, 2015. "The Effects of Work Force Diversity on Employee Performance in Singapore Organisations," International Journal of Business Administration, International Journal of Business Administration, Sciedu Press, vol. 6(2), pages 17-29, March.

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    More about this item

    Keywords

    aging; competition; social production functions; experiment; incentives;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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