Bonus versus Penalty: How Robust Are the Effects of Contract Framing?

de Quidt, Jonathan, Fallucchi, Francesco, Kolle, Felix, Nosenzo, Daniele and Quercia, Simone (2016) Bonus versus Penalty: How Robust Are the Effects of Contract Framing?

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Abstract

We study the relative effectiveness of contracts that are framed either in terms of bonuses or penalties. In one set of treatments subjects know at the time of effort provision whether they have achieved the bonus / avoided the penalty. In another set of treatments subjects only learn the success of their performance at the end of the task. We fail to observe a contract framing effect in either condition: effort provision is statistically indistinguishable under bonus and penalty contracts. We discuss possible reasons for this null result.

Item Type: Article
Uncontrolled Keywords: contract framing,bonus,penalty,fine,loss aversion
Faculty \ School: Faculty of Social Sciences > School of Economics
Related URLs:
Depositing User: Pure Connector
Date Deposited: 24 Sep 2016 02:05
Last Modified: 05 Feb 2019 00:56
URI: https://ueaeprints.uea.ac.uk/id/eprint/60475
DOI:

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