Bonus versus penalty: How robust are the effects of contract framing?
Open Access
- 1 December 2017
- journal article
- research article
- Published by Cambridge University Press (CUP) in Journal of the Economic Science Association
- Vol. 3 (2) , 174-182
Abstract
We study the relative effectiveness of contracts that are framed either in terms of bonuses or penalties. In one set of treatments, subjects know at the time of effort provision whether they have achieved the bonus/avoided the penalty. In another set of treatments, subjects only learn the success of their performance at the end of the task. We fail to observe a contract framing effect in either condition: effort provision is statistically indistinguishable under bonus and penalty contracts.Keywords
All Related Versions
Funding Information
- Economic and Social Research Council (ES/K002201/1)
- Handelsbanken's Research Foundations (B2014-0460:1)
This publication has 18 references indexed in Scilit:
- Conducting interactive experiments onlineExperimental Economics, 2018
- Your Loss Is My Gain: A Recruitment Experiment with Framed IncentivesJournal of the European Economic Association, 2017
- Cheating and Loss Aversion: Do People Cheat More to Avoid a Loss?Management Science, 2016
- What Motivates Effort? Evidence and Expert Forecasts2016
- FRAMING OF INCENTIVES AND EFFORT PROVISIONInternational Economic Review, 2015
- Enhancing the Efficacy of Teacher Incentives through Loss Aversion: A Field Experiment2012
- Framing Contracts: Why Loss Framing Increases EffortJournal of Institutional and Theoretical Economics, 2012
- Relative Earnings and Giving in a Real-Effort ExperimentAmerican Economic Review, 2011
- Bonus versus Penalty: Does Contract Frame Affect Employee Effort?2005
- Distribution Theory for Glass's Estimator of Effect size and Related EstimatorsJournal of Educational Statistics, 1981