Large stakes and big mistakes

Published

Scholarly Edition

Workers in a wide variety of jobs are paid based on performance, which is commonly seen as enhancing effort and productivity relative to non-contingent pay schemes. However, psychological research suggests that excessive rewards can, in some cases, result in a decline in performance. To test whether very high monetary rewards can decrease performance, we conducted a set of experiments in the U.S. and in India in which subjects worked on different tasks and received performance-contingent payments that varied in amount from small to very large relative to their typical levels of pay. With some important exceptions, very high reward levels had a detrimental effect on performance. © 2009 The Review of Economic Studies Limited.

Full Text

Duke Authors

Cited Authors

  • Ariely, D; Gneezy, U; Loewenstein, G; Mazar, N

Published Date

  • April 15, 2009

Start / End Page

  • 451 - 469

Digital Object Identifier (DOI)

  • 10.1111/j.1467-937X.2009.00534.x

Citation Source

  • Scopus