Essays on the Effort Provision of People Under the Presence of Risky and Ambiguous Shocks

Melnikov, Vincent (2024) Essays on the Effort Provision of People Under the Presence of Risky and Ambiguous Shocks. Doctoral thesis, University of East Anglia.

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Abstract

This thesis investigates how people exert effort in environments where shocks occur that increase or decrease the time cost of effort that is required of them in order to complete a series of tasks.

Chapter 1 examines how individuals exert effort when the possibility of a negative shock is present that will increase the time cost of effort of engaging in a real-effort task. We conduct an experiment in which participants engage in ten rounds of a task that is split into two sections of five rounds. The first five rounds have the same time cost for all participants, with the second five rounds having a chance of having either a greater or same time cost. Our treatments determine the level of information that participants receive about the probability of the negative shock occurring. Our treatments are full information, risk and ambiguity. Participants in the full information treatment know upfront the time cost of all rounds in both sections. In the risk treatment, participants are told that there is a 50/50 chance of the shock occurring. In the ambiguity treatment, participants are told that there is some unspecified chance of the shock occurring. Our findings suggest that participants in the full information and ambiguity treatments exert similar effort, with participants in the risk treatment exerting significantly less effort.

Chapter 2 looks at how individuals exert effort when the potential shock to time cost of effort is positive. We use a similar design for our experiment as in chapter 1 with the shock now decreasing the time cost of effort rather than increasing it. Our treatment groups for this experiment are risk and ambiguity. Our findings suggest that when the potential shock is positive, participants in both the risk and ambiguity treatments exert similar levels of effort, seemingly unaffected by the level of information provided to them.

Chapter 3 compares the results of chapters 1 and 2, aiming to determine whether there is a reference point effect in how people exert effort based on whether the shock is negative or positive. We suggest that relative differences between the behaviours of participants in the risk and ambiguity treatments are primarily caused by the framing of the outcomes. We find that in the domain of gains, there are no significant differences between the two treatments, indicating that participants treated risk the same as they did ambiguity. In the domain of losses, we find that participants in the ambiguity treatment are more likely to engage with the task and take on the time costs of effort.

Item Type:	Thesis (Doctoral)
Faculty \ School:	Faculty of Social Sciences > School of Economics
Depositing User:	Kitty Laine
Date Deposited:	28 Mar 2025 11:33
Last Modified:	28 Mar 2025 11:33
URI:	https://ueaeprints.uea.ac.uk/id/eprint/98901
DOI:

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