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Financial Incentives and Cognitive Abilities: Evidence from a Forecasting Task with Varying Cognitive Load

Year: 2007

Type: preprint

Abstract: I examine how financial incentives interact with intrinsic motivation and especially cognitive abilities in explaining heterogeneity in performance. Using a forecasting task with varying cognitive load, I show that the effectiveness of high-powered financial incentives as a stimulator of economic performance can be moderated by cognitive abilities in a causal fashion. Identifying the causality of cognitive abilities is a prerequisite for studying their interaction with financial and intrinsic incentives in a unifying framework, with implications for the design of efficient incentive schemes.

Source: RePEc: Research Papers in Economics

Author: Ondřej Rydval

Institutions: Center for Economic Research and Graduate Education – Economics Institute, Charles University

Language: English

Topic: Experimental Behavioral Economics Studies

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W1546491209

Cites: 80

Cited by: 6

Related to: 10