Prior literature has observed a “hidden return to incentives” where principals receive more cooperation from agents when formal incentives are available but not used than when not available. Previous experiments are replicated using a gift-exchange rather than a trust game. Hidden returns to incentives are not observed, and in fact the results show the opposite. Suggestions for future research are provided.
Davis, J., Schwartz, S. and Young, R. (2017) A Reexamination of “The Hidden Return to Incentives”. Theoretical Economics Letters , 7, 1505-1510. doi: 10.4236/tel.2017.75101
The authors and Scientific Research Publishing Inc.
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