Workaholics and dropouts in organizations

Wieland Müller, Andrew Schotter

    Research output: Contribution to journalArticle

    Abstract

    This paper reports the results of experiments designed to test the theory of the optimal composition of prizes in contests. In the aggregate the behavior of subjects is consistent with that predicted by the theory, but we find that such aggregate results mask an unexpected compositional effect on the individual level. Whereas theory predicts that subject efforts are continuous and increasing functions of ability, the actual efforts of our laboratory subjects bifurcate. Low-ability workers drop out and exert little or no effort, and high-ability workers try too hard. This bifurcation, which is masked by aggregation, can be explained by assuming loss aversion on the part of the subjects. (JEL: C92, D44, D72, D82, J31)

    Original languageEnglish (US)
    Pages (from-to)717-743
    Number of pages27
    JournalJournal of the European Economic Association
    Volume8
    Issue number4
    DOIs
    StatePublished - Jun 2010

    ASJC Scopus subject areas

    • Economics, Econometrics and Finance(all)

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