Risk aversion in prediction markets: A framed-field experiment

2016 ◽  
Vol 69 (11) ◽  
pp. 5071-5075 ◽  
Author(s):  
Béatrice Boulu-Reshef ◽  
Irene Comeig ◽  
Robert Donze ◽  
Gregory D. Weiss
2020 ◽  
Author(s):  
Jessen L. Hobson ◽  
Ryan D. Sommerfeldt ◽  
Laura W. Wang

We examine the effect of performance-based pay on misreporting intended to benefit a social mission. We show that performance-based pay decreases people's propensity to misreport for a social mission in a not-for-profit setting (Experiment 1). We similarly show that, in a for-profit setting, performance-based pay also decreases misreporting propensity for a social mission, though not for a non-social mission (Experiment 2). Finally, using a framed field experiment with participants attending a conference hosted by a real charity, we show that performance-based pay reduces actual misreporting when misreporting leads to more donations for the charity (Experiment 3). These results are consistent with our theory suggesting that, relative to fixed pay, performance-based pay imposes additional costs on misreporting employees' self-concepts of benevolence and honesty.


2018 ◽  
Vol 26 (2) ◽  
pp. 91-96 ◽  
Author(s):  
Wojciech Hardy ◽  
Michal Krawczyk ◽  
Joanna Tyrowicz

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