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12 Jun, 2019 · 12:30 al 12 Jun, 2019 · 14:00 Facultad de Ciencias Económicas y Empresariales

Conferencia “Probabilistic Reward Schemes: Experimental Evidence”

José M. Ortiz

Conferencias, seminarios, divulgación científica


Conferencia impartida por el profesor José M. Ortiz (Middlesex University) dentro de la serie de seminarios de investigación organizada por el Departamento de Teoría e Historia Económica.

Abstract: Motivating low ability workers using target bonuses is a difficult task when the production objective is hard to reach for them. As long as they know their limitations, they may feel discouraged to work because they will never reach the goal and consequently they will never receive the bonus. The main objective of this research project is to find the ways how to motivate low ability workers to increase their performance and get a chance to get the bonus. We suggest that introducing probabilistic reward scheme will enhance the performance of low ability workers. We conduct an experiment including five treatments, i.e. (i) baseline, in which there is no goal or bonus; (ii) traditional,
in which the worker gets the bonus only if he/she reaches the goal; (iii) partial bonus, in which the worker gets a part of the bonus each time (s)he produces one fourth of the goal; (iv) partial lottery, in which the workers will play a lottery each time they reach one fourth of the goal; (v) final lottery, in which workers will play a lottery at the end of the task and the probability of winning the lottery increases with performance. We find that high ability workers perform better when a final lottery is involved in the bonus payment and they equally perform along the rest of treatments. We also find that low ability workers perform better when a lottery is involved in the bonus payment
than when the payment is fixed. In this case, the final lottery treatment outperforms the partial lottery treatment.