The Negative Consequences of Loss-Framed Performance Incentives

• 成果类型: Article
• 署名作者: Pierce, Lamar; Rees-Jones, Alex; Blank, Charlotte
• 署名单位: Washington University (WUSTL); University of Pennsylvania; National Bureau of Economic Research
• 刊物名称: AMERICAN ECONOMIC JOURNAL-ECONOMIC POLICY
• ISSN/ISSBN: 1945-7731
• DOI: 10.1257/pol.20220512
• 发表日期: 2025
• 页码: 506-539
• 关键词: synthetic control methods; asset ownership; prospect-theory; loss aversion; COMPENSATION; CONTRACTS; BEHAVIOR; PRODUCTIVITY; multitasking; Bonuses

摘要

Behavioral economists have proposed that incentive contracts result in higher productivity when bonuses are loss framed-prepaid then clawed back if targets are unmet. We test this claim by randomizing the pre- or postpayment of sales bonuses at 294 car dealerships. Although somewhat statistically imprecise, our analysis provides strong indications that the random assignment of loss framing had quantitatively important negative effects. We document that the negative effects of loss framing can arise due to an increase in incentives for gaming behaviors. Based on these claims, we reassess the common wisdom regarding the desirability of loss framing. (JEL C93, D91, J24, J33, L62, L81)