“What Motivates Effort? Evidence and Expert Forecasts” with Devin Pope, UChicago

Event time: 
Tuesday, December 13, 2016 - 12:00pm to 1:15pm
Institution for Social and Policy Studies (ISPS), Room A002 See map
77 Prospect St.
New Haven, CT 06511
(Location is wheelchair accessible)
Devin Pope, University of Chicago
Event description: 


Abstract: How much do different monetary and non-monetary motivators induce costly effort? Does the effectiveness line up with the expectations of researchers? We present the results of a large-scale real-effort experiment with 18 treatment arms. We compare the effect of three motivators: (i) standard incentives; (ii) behavioral factors like present bias, reference dependence, and social preferences; and (iii) non-monetary inducements from psychology. In addition, we elicit forecasts by behavioral experts regarding the effectiveness of the treatments, allowing us to compare results to expectations. We find that (i) monetary incentives work largely as expected, including a very low piece rate treatment which does not crowd out incentives; (ii) the evidence is partly consistent with standard behavioral models, including warm glow, though we do not find evidence of probability weighting; (iii) the psychological motivators are effective, but less so than incentives. We then compare the results to forecasts by 208 experts. On average, the experts anticipate several key features, like the effectiveness of psychological motivators. A sizeable share of experts, however, expects crowd-out, probability weighting, and pure altruism, counterfactually. This heterogeneity does not reflect field of training, as behavioral economists, standard economists, and psychologists make similar forecasts. Using a simple model, we back out key parameters for social preferences, time preferences, and reference dependence, comparing expert beliefs and experimental results.

Speaker: Devin Pope studies a variety of topics at the intersection of economics and psychology. He received his PhD in economics from UC Berkeley in 2007 and is currently Professor of Behavioral Science at the Booth School of Business at the University of Chicago.