TITLE:
A Reexamination of “The Hidden Return to Incentives”
AUTHORS:
Jing Davis, Steven Schwartz, Richard Young
KEYWORDS:
Incentives, Trust Game, Gift-Exchange Game
JOURNAL NAME:
Theoretical Economics Letters,
Vol.7 No.5,
August
18,
2017
ABSTRACT: Prior literature has observed a “hidden return to
incentives” where principals receive more cooperation from agents when formal
incentives are available but not used than when not available. Previous
experiments are replicated using a gift-exchange rather than a trust game.
Hidden returns to incentives are not observed, and in fact the results show the
opposite. Suggestions for future research are provided.