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Pay Enough - Or Don't Pay at All

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Listed:
  • Gneezy, U.

    (Tilburg University, School of Economics and Management)

  • Rustichini, A.

    (Tilburg University, School of Economics and Management)

Abstract

Economists usually assume that monetary incentives improve performance, and psychologists claim that the opposite may happen. We present and discuss a set of experiments designed to test these contrasting claims. We found that the effect of monetary compensation on performance was not monotonic. In the treatments in which money was offered, a larger amount yielded a higher performance. However, offering money did not always produce an improvement: subjects who were offered monetary incentives performed more poorly than those who were offered no compensation. Several possible interpretations of the results are discussed.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Gneezy, U. & Rustichini, A., 1998. "Pay Enough - Or Don't Pay at All," Other publications TiSEM 641eb9a4-f245-483b-8c01-6, Tilburg University, School of Economics and Management.
    • Handle: RePEc:tiu:tiutis:641eb9a4-f245-483b-8c01-6994a6cf6ca6
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    1. George A. Akerlof & Janet L. Yellen, 1990. "The Fair Wage-Effort Hypothesis and Unemployment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(2), pages 255-283.
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    More about this item

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • D9 - Microeconomics - - Micro-Based Behavioral Economics

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