Incentive Schemes, Sorting, and Behavioral Biases of Employees: Experimental Evidence

• 成果类型: Article
• 署名作者: Larkin, Ian; Leider, Stephen
• 署名单位: Harvard University; University of Michigan System; University of Michigan
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.4.2.184
• 发表日期: 2012
• 页码: 184-214
• 关键词: ceo overconfidence; GENDER; personality; performance; INFORMATION; confidence; CONTRACTS; accuracy; optimism; version

摘要

We investigate how the convexity of a firm's incentives interacts with worker overconfidence to affect sorting decisions and performance. We demonstrate, experimentally, that overconfident employees are more likely to sort into a nonlinear incentive scheme over a linear one, even though this reduces pay for many subjects and despite the presence of clear feedback. Additionally, the linear scheme attracts demotivated, underconfident workers who perform below their ability. Our findings suggest that firms may design incentive schemes that adapt to the behavioral biases of employees to sort in (sort away) attractive (unattractive) employees; such schemes may also reduce a firm's wage bill. (JEL D03, D83, J24, J31, M12)