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Real incentives really matter

Abstract
Incentivizing behavior, a core principle of experimental methods in economics, is currently under scrutiny due to a series of papers that find little to no difference in choices made under real or hypothetical incentives. In this study, we assess the effectiveness of hypothetical incentives to induce subjects’ real effort-an integral aspect of reliable experimental data. We find that linking behavior to hypothetical incentives leads to a marginal increase in effort when compared to no reference to such incentives (Cohen’s d: 0.16), but they are nowhere near the effort levels achieved under real ones (Cohen’s d: 1.41). Our exploratory analysis suggests that providing real incentives is also more effective in eliminating inattention towards the instructions and complete indifference towards the task compared to the non-incentivized alternatives. 

Keywords:Real Incentives, Hypothetical Incentives, No Incentives, Real Effort
JEL Codes:C90, C91, D01

Cite this article as:
Drobner, C., Goerg, J.S. & Kopsacheilis.O. (2024), Real incentives really matter