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The Impact of Financial Incentives on Task Performance: The Role of Cognitive Abilities & Intrinsic Motivation
Rydval, Ondřej ; Ortmann, Andreas (advisor) ; Harrison, Glenn (referee) ; Camerer, Colin (referee)
DISSERTATION ABSTRACT Economists widely believe that, absent strategic considerations such as agency problems, financial incentives represent the dominant and effective stimulator of human productive activities. In production settings that are cognitively demanding, however, the effectiveness of financial incentives may be moderated by individual heterogeneity in cognitive abilities, intrinsic motivation and other personality characteristics. Even if strong financial incentives induce high effort, both financial and cognitive resources may be wasted for individuals with insufficient cognitive abilities. This prediction, if warranted, calls for attention to cognitive abilities in designing efficient incentive schemes in firms, experimental settings and elsewhere. My dissertation examines how financial incentives interact with intrinsic motivation and especially cognitive abilities in determining cognitive performance. In Rydval (2003), I present an initial literature review, particularly noting lack of empirical evidence on the interaction between financial incentives and cognitive abilities. Building on the review, Chapter 1 of the dissertation illustrates that general cognitive abilities appear at least as important for performance in a psychometric test as does a sizeable variation in piece-rate financial...
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