TY  - RPRT
        AU  - Cadsby, Bram
AU  - Engle-Warnick, Jim
AU  - Fang, Tony
AU  - Song, Fei
        TI  - Psychological Incentives, Financial Incentives, and Risk Attitudes in Tournaments: An Artefactual Field Experiment
        PY  - 2015/Dec/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 9565
        UR  - https://www.iza.org/publications/dp9565
        AB  - Tournaments are widely used to assign bonuses and determine promotions because of the link between relative performance and rewards. However, performing relatively well (poorly) may also yield psychological benefits (pain). This may also stimulate effort. Through a real-effort artefactual field experiment with factory workers and university students as a comparison group in China, we examine how both psychological and financial incentives, together with attitudes toward risk, may influence motivation and performance. We provided performance-ranking information both privately and publicly, with and without rank-based financial incentives.
Our results show that performance-ranking information had a significant motivational effect on average performance for students, but not for that of workers. Adding financial incentives based on rank provided little evidence of further improvement. Much of the difference between workers and students can be explained by differences in attitudes toward risk. Indeed, for both groups financial and psychological incentive effects are both inversely related to individual levels of risk aversion, and are positive and significant both for workers and for students who are sufficiently risk-tolerant.
        KW  - social comparison
KW  - incentives
KW  - risk aversion
KW  - artefactual field experiment
KW  - performance feedback
KW  - peer pressure
KW  - tournament
        ER  -