Hostname: page-component-7b9c58cd5d-dkgms Total loading time: 0 Render date: 2025-03-16T21:56:38.721Z Has data issue: false hasContentIssue false
  • English
  • Français

On the incentive effects of monitoring: evidence from the lab and the field

Published online by Cambridge University Press:  14 March 2025

Amadou Boly
Amadou Boly*
Affiliation:
Development Policy and Strategic Research Branch, United Nations Industrial Development Organization, Vienna International Center, P.O. Box 300, 1400, Vienna, Austria
*
e-mail: a.boly@unido.org
Get access Rights & Permissions [Opens in a new window]

Abstract

Several experimental studies have shown that the crowding-out effect of monitoring may outweigh its disciplining effect through intrinsic motivation destruction, thereby reducing effort. However, most of these experiments use numeric effort tasks that subjects may not be intrinsically motivated to complete. This paper aims to analyze the incentive effects of monitoring using a real-effort task for which intrinsic motivation is more likely to exist. We conducted two similar experiments, in the lab in Montreal and in the field in Ouagadougou. In contrast to the lab, subjects in the field are unaware they are taking part in an experiment.

The following results are observed both in the lab and in the field. Relative to the baseline treatment, we find that our two monitoring treatments significantly increase effort, in line with agency theory. However, effort levels are not significantly different between the monitoring treatments. Finally, increasing the subjects’ wage is found to have no effect on effort.

Keywords

Experimental economicsMonitoringCrowding-out effect

JEL classification

C9: Design of Experiments J2: Demand and Supply of Labor M5: Personnel Economics
Type
Research Article
Information
Experimental Economics , Volume 14 , Issue 2 , May 2011 , pp. 241 - 253
Copyright
Copyright © Economic Science Association 2010

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

I am indebted to the editor and two anonymous referees for helpful comments. I would like to thank Jim Engle-Warwick, Gérard Gaudet, Julie Héroux, Abraham Hollander, Claude Montmarquette, and participants at the ESA 2008 European Meeting in Lyon. I am particularly indebted to Olivier Armantier. All remaining errors are mine. The views expressed herein are those of the author and do not necessarily reflect the views of the United Nations Industrial Development Organization.

Electronic supplementary material The online version of this article (doi: 10.1007/s10683-010-9265-1) contains supplementary material, which is available to authorized users.

References

Alchian, A. A., & Demsetz, H. (1972). Production, information costs, and economic organization. American Economic Review, 62(5), 777–795.Google Scholar
Armantier, O., & Boly, A. (2008). Can corruption be studied in the lab? Comparing a field and a lab experiment. CIRANO Working Papers, s2008-26.CrossRefGoogle Scholar
Becker, G. S. (1968). Crime and punishment: an economic approach. Journal of Political Economy, 76(2), 169–217.CrossRefGoogle Scholar
Delfgaauw, J., & Dur, R. (2008). Incentives and Workers’ motivation in the public sector. Economic Journal, 118, 171–191.CrossRefGoogle Scholar
Dickinson, D. L. (2001). The carrot vs. the stick in work team motivation. Experimental Economics, 4(1), 107–124.CrossRefGoogle Scholar
Dickinson, D. L., & Villeval, M. C. (2008). Does monitoring decrease work effort? The complementarity between agency and crowding-out theories. Games and Economic Behavior, 63, 56–76.CrossRefGoogle Scholar
Dur, R. (2009). Gift exchange in the workplace: money or attention? Journal of the European Economic Association, 7, 550–560.CrossRefGoogle Scholar
Falk, A., & Kosfeld, M. (2006). Distrust - the hidden cost of control. American Economic Review, 96(5), 1611–1630.CrossRefGoogle Scholar
Fehr, E., & Falk, A. (2002). Psychological foundations of incentives. European Economic Review, 46(4- 5), 687–724.CrossRefGoogle Scholar
Fehr, E., & Gächter, S. (2002). Do incentive contracts crowd out voluntary cooperation? Working paper No. 34, Institute for Empirical Research in Economics, University of Zurich.Google Scholar
Fehr, E., & Rockenbach, B. (2003). Detrimental effects of sanctions on human altruism. Nature, 422, 137–140.CrossRefGoogle ScholarPubMed
Fehr, E., & Schmidt, K. M. (2007). Adding a stick to the carrot? The interaction of bonuses and fines. American Economic Review, 97, 177–81.CrossRefGoogle Scholar
Frey, B. S. (1993). Does monitoring increase work effort? The rivalry with trust and loyalty. Economic Inquiry, 31, 663–670.CrossRefGoogle Scholar
Frey, B. S., & Oberholzer-Gee, F. (1997). The cost of price incentives: an empirical analysis of motivation crowding-out. American Economic Review, 87, 746–755.Google Scholar
Frey, B. S., & Jegen, R. (2001). Motivation crowding theory. Journal of Economic Surveys, 15(5), 589611.CrossRefGoogle Scholar
Gächter, S., & Falk, A. (2002). Work motivation, institutions, and performance. In Zwick, R. & Rapoport, A. (Eds.), Experimental business research (pp. 351–372). Norwell: Kluwer Academic.CrossRefGoogle Scholar
Gneezy, U., & List, J. A. (2006). Putting behavioral economics to work: testing for gift exchange in labor markets using field experiments. Econometrica, 74(5), 1365–1384.CrossRefGoogle Scholar
Gneezy, U., & Rustichini, A. (2000). A fine is a price. Journal of Legal Studies, 19, 1–18.Google Scholar
Hennig-Schmidt, H., Rockenbach, B., & Sadrieh, A. (2010). In search of workers’ real effort reciprocity - a field and a laboratory experiment. Journal of the European Economic Association, 8(4), 817–837.Google Scholar
Kube, S., Marechal, M. A., & Puppe, C. (2008). The currency of reciprocity: gift-exchange in the workplace. Working Paper Series, Nr. 377, Universtiy of Zürich.Google Scholar
Levitt, S. D., & List, J. A. (2007). What do laboratory experiments measuring social preferences tell us about the real world. Journal of Economic Perspectives, 21(2), 153–174.CrossRefGoogle Scholar
Loewenstein, G. (1999). Experimental economics from the vantage-point of behavioral economics. Economic Journal, 109(453), 25–34.CrossRefGoogle Scholar
Nagin, D. S., Rebitzer, J. B., Sanders, S., & Taylor, L. J. (2002). Monitoring, motivation, and management: the determinants of opportunistic behavior in a field experiment. American Economic Review, 92(4), 850–873.CrossRefGoogle Scholar
Ryan, R. M., & Deci, E. L. (2000). Intrinsic and extrinsic motivations: classic definitions and new directions. Contemporary Educational Psychology, 25, 54–67.CrossRefGoogle ScholarPubMed
Schulze, G. G., & Frank, B. (2003). Deterrence versus intrinsic motivation: experimental evidence on the determinants of corruptibility. Economics of Governance, 4, 143–160.CrossRefGoogle Scholar
Smith, V. L. (1982). Microeconomic systems as an experimental science. American Economic Review, 72, 923–955.Google Scholar
Starmer, C. (1999). Experimental economics: hard science or wasteful tinkering? Economic Journal, 109(453), 5–15.CrossRefGoogle Scholar
Supplementary material: File

Boly supplementary material

Boly supplementary material
Download Boly supplementary material(File)
File 40.3 KB