%0 Report
        %A Irlenbusch, Bernd
%A Sliwka, Dirk
        %T Incentives, Decision Frames, and Motivation Crowding Out – An Experimental Investigation
        %D 2005
        %8 2005 Sep
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 1758
        %U https://www.iza.org/index.php/publications/dp1758
        %X A simple principal agent problem is experimentally investigated in which a principal repeatedly sets a wage and an agent responds by choosing an effort level. The principal's payoff is determined by the agent's effort. In a first setting the principal can only set a fixed wage in each period. In a second setting the principal has the possibility to supplement the fixed wage with a piece rate. Surprisingly, efforts are lower in the case where piece rates can be paid. Furthermore, switching in the same treatment from a setting where piece rates are available to one where only fixed wages can be paid tends to lead to even lower effort levels. Based on our findings we suggest a new explanation for motivation crowding out by arguing that the use of piece rates considerably alters the principals' and agents' perception of the situation.
        %K incentives
%K crowding-out
%K reciprocity
%K reputation
%K experiment