Seminar  |  06/14/2017 | 12:00 PM  –  01:30 PM

Brown Bag Seminar: Incentivizing Complex Problem Solving in Teams - Evidence from a Field Experiment

Simeon Schudy (LMU Munich)

Max Planck Institute for Innovation and Competition, Munich, Room 313

We document the causal effect of simple bonus incentives on performance in a non-routine, cognitively demanding, interactive team task. These tasks are more and more important in the economy and at the same time understudied. We conduct a field experiment and show a causal positive effect of incentives on the completion probability and the overall completion time of the task. Using several experimental treatment variations we shed light on the importance of different bonus components. We study the framing of bonuses (as gains or losses) and investigate whether bonus incentives work due to i)the monetary reward or ii) the reference performance bonus incentives provide. We also investigate the robustness of the effect in an additional sample and study the reactions to bonus incentives by differently composed teams. Finally, we shed light on how bonus incentives affect teams' willingness to explore in the non-routine task. (joint with F. Englmaier, S. Grimm and D. Schindler)

Contact person: Dr. Marco Kleine