TY  - RPRT
        AU  - Abeler, Johannes
AU  - Huffman, David B.
AU  - Raymond, Collin
        TI  - Incentive Complexity, Bounded Rationality and Effort Provision
        PY  - 2023/Jul/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 16284
        UR  - https://www.iza.org/index.php/publications/dp16284
        AB  - Using field and laboratory experiments, we demonstrate that the complexity of incentive schemes and worker bounded rationality can affect effort provision, by shrouding attributes of the incentives. In our setting, complexity leads workers to over-provide effort relative to a fully rational benchmark, and improves efficiency. We identify contract features, and facets of worker cognitive ability, that matter for shrouding. We find that even relatively small degrees of shrouding can cause large shifts in behavior. Our results illustrate important implications of complexity for designing and regulating workplace incentive contracts.
        KW  - complexity
KW  - bounded rationality
KW  - shrouded attribute
KW  - ratchet effect
KW  - dynamic incentives
KW  - field experiments
        ER  -