Competitive Incentives: Working Harder or Working Smarter? Competitive Incentives: Working Harder or Working Smarter?

By Anat Bracha and Chaim Fershtman

Almost all jobs require a combination of cognitive effort and labor effort. This paper focuses on the effect that competitive incentive schemes have on the chosen combination of these two types of efforts. We use an experimental approach to show that competitive incentives may induce agents to work harder but not necessarily smarter. This effect was stronger for women.