Bonus versus penalty: how robust are the effects of contract framing?

De Quidt, Jonathan and Fallucchi, Francesco and Kölle, Felix and Nosenzo, Daniele and Quercia, Simone (2017) Bonus versus penalty: how robust are the effects of contract framing? Journal of the Economic Science Association . ISSN 2199-6776 (In Press)

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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.

Item Type: Article
Keywords: contract framing; bonus; penalty; fine; loss aversion
Schools/Departments: University of Nottingham, UK > Faculty of Social Sciences > School of Economics
Depositing User: Eprints, Support
Date Deposited: 04 Sep 2017 09:41
Last Modified: 13 Oct 2017 07:56
URI: http://eprints.nottingham.ac.uk/id/eprint/45397

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