Behavioral Economics and Psychology of Incentives
Emir Kamenica.
University of Chicago Booth School of Business
February 2012
Abstract
Monetary incentives can back.re while non-standard 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.
DO PEOPLE ALWAYS RESPOND TO INCENTIVES? EXPERIENCE IN DATA GATHERING THROUGH FACE TO FACE INTERVIEWS
Evan Tanasiuk
Grant MacEwan University
Shahidul Islam
Grant MacEwan University
ABSTRACT
Incentives of different forms and at different stages are used for motivating people to participate
in human subject research. Although it is accepted that incentives, in general, play a positive role
in increasing the participation rate, there are exceptions. Incentives may contaminate the quality
of research findings or may even reduce response rate in some circumstances. If the research
project is purely for public goods, the researcher does not have any intention of personal gain,
and that message is clearly conveyed to the prospective respondents, a material incentive may not
be needed. Under such a situation, peoples’ altruistic behavior takes precedence over
psychological egoism.