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RIEB, Kobe University Site Map Access 日本語 Home Research & Education Publications RIEB Discussion Paper Series (English) RIEB Discussion Paper Series No.2014-20 RIEB Discussion Paper Series No.2014-20 Title An Experimental Examination of Compensation Schemes and Level of Effort in Differentiated Tasks Abstract We examine the influence of different compensation schemes on exertion of effort for differentiated tasks. The first type of task is assumed to be boring and has no intrinsic motivation, while the second is assumed to be interesting, and has a higher intrinsic motivation. The results are as follows: (1) in the first task, standard economic theory, which claims higher pay should result in higher effort, does not hold. (2) Standard economic theory holds for the second task, which predicts that the higher the incentive, the more effort one exerts, and achieves a higher performance on average. Keywords Real effort experiment, Intrinsic motivation, Loss aversion, Fixed pay, Incentive pay JEL Classification M52, J33 Inquiries Hiromasa TAKAHASHI Faculty of International Studies, Hiroshima City University, Japan Junyi SHEN Research Institute for Economics and Business Administration, Kobe University Rokkodai-cho, Nada-ku, Kobe 657-8501 Japan Phone: +81-78-803-7036 FAX: +81-78-803-7059 Kazuhito OGAWA Faculty of Sociology, Kansai University, Japan About RIEB Faculty Seminars at RIEB Research & Education Sections Kobe University Site Policy Site Map Access Contact Us Copyright©1996-2018 Research Institute for Economics and Business Administration, Kobe University. All Rights Reserved.