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Capital and Labor Effects in a Recall Task: More Evidence in Support of Camerer and Hogarth (1999)

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  • Ondrej Rydval

Abstract

This paper extends existing evidence on the interaction and relative productivity of cognitive effort and cognitive capital in an experimental environment. I focus on the impact of task-specific cognitive capital, which is central to the capital-labor argument of Camerer and Hogarth (1999) as well as related research in cognitive science and behavioral decision making. Using a memory recall task situated in an accounting setting, I show that the impact of taskspecific accounting knowledge on recall performance varies with the timing of the introduction of performance-contingent financial incentives. I further illustrate that subjects better endowed with task-specific accounting knowledge greater improve recall performance in response to the introduction of performance-contingent financial incentives. I draw implications for further research of the capital-labor-production framework and for compensation practices in experiments as well as work settings.

Suggested Citation

  • Ondrej Rydval, 2005. "Capital and Labor Effects in a Recall Task: More Evidence in Support of Camerer and Hogarth (1999)," CERGE-EI Working Papers wp264, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    • Handle: RePEc:cer:papers:wp264
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    More about this item

    Keywords

    Financial incentives; Cognitive abilities; Experiments; Field experiments.;
    All these keywords.

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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