Journal ArticleDOI
Behavioral Economics and Psychology of Incentives
TLDR
The authors discuss the relative role of beliefs, preferences, and technology in the anomalous impacts of incentives and argue that inference, signaling, loss aversion, dynamic inconsistency, and choking are the primary factors that explain the data.Abstract:
Monetary incentives can backfire while nonstandard interventions, such as framing, can be effective in influencing behavior. I review the empirical evidence on these two sets of anomalies. Paying for inherently interesting tasks, paying for prosocial behavior, paying too much, paying too little, and providing too many options can all be counterproductive. At the same time, proper design of the decision-making environment can be a potent way to induce certain behaviors. After presenting the empirical evidence, I discuss the relative role of beliefs, preferences, and technology in the anomalous impacts of incentives. I argue that inference, signaling, loss aversion, dynamic inconsistency, and choking are the primary factors that explain the data.read more
Citations
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Journal ArticleDOI
When and Why Incentives (Don't) Work to Modify Behavior
TL;DR: In this article, the authors discuss how extrinsic incentives may come into conflict with other motivations and examine the research literature on three important examples in which monetary incentives have been used in a non-employment context to foster the desired behavior: education, increasing contributions to public goods, and helping people change their lifestyles, particularly with regard to smoking and exercise.
Journal ArticleDOI
Getting to the Top of Mind: How Reminders Increase Saving
TL;DR: A model of limited attention in intertemporal choice posits that individuals fully attend to consumption in all periods but fail to attend to some future lumpy expenditure opportunities, which generates some predictions that overlap with models of present-bias and generates the unique predictions that reminders may increase saving and that reminders will be more effective when they increase the salience of a specific expenditure.
Journal ArticleDOI
Social Identity and Preferences
TL;DR: In this paper, the marginal behavioral effect of social identities on discount rates and risk aversion was identified by measuring how laboratory subjects' choices change when an aspect of social identity is made salient.
Journal ArticleDOI
Getting More Work for Nothing? Symbolic Awards and Worker Performance
TL;DR: This work hires students to work on a database project and offers a congratulatory card from the organization honoring the best performance, showing strong evidence for the motivating power of status and social recognition in labor relations.
Journal ArticleDOI
Can Higher Prices Stimulate Product Use? Evidence from a Field Experiment in Zambia
TL;DR: In this article, the authors developed a methodology for separating the two effects: screening effect and sunk-cost effect, and implemented the methodology in a field experiment in Zambia using door-to-door marketing of a home water purification solution.
References
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Book
Judgment Under Uncertainty: Heuristics and Biases
Amos Tversky,Daniel Kahneman +1 more
TL;DR: The authors described three heuristics that are employed in making judgements under uncertainty: representativeness, availability of instances or scenarios, and adjustment from an anchor, which is usually employed in numerical prediction when a relevant value is available.
Book
A Theory of Cognitive Dissonance
TL;DR: Cognitive dissonance theory links actions and attitudes as discussed by the authors, which holds that dissonance is experienced whenever one cognition that a person holds follows from the opposite of at least one other cognition that the person holds.
Journal ArticleDOI
Crime and Punishment: An Economic Approach
TL;DR: In fact, some common properties are shared by practically all legislation, and these properties form the subject matter of this essay as discussed by the authors, which is the basis for this essay. But, in spite of such diversity, some commonsense properties are not shared.
Book
Nudge: Improving Decisions About Health, Wealth, and Happiness
TL;DR: In Nudge as discussed by the authors, Thaler and Sunstein argue that human beings are susceptible to various biases that can lead us to blunder and make bad decisions involving education, personal finance, health care, mortgages and credit cards, the family, and even the planet itself.
Journal ArticleDOI
Multitask Principal–Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design
Bengt Holmstrom,Paul Milgrom +1 more
TL;DR: In this article, a principal-agent model that can explain why employment is sometimes superior to independent contracting even when there are no productive advantages to specific physical or human capital and no financial market imperfections to limit the agent's borrowings is presented.