An Experimental Study of Incentive Reversal in Sequential and Simultaneous Games

I t is commonly held that increasing monetary rewards enhance work effort. This study, however, argues that this will not ineludibly occur in team activities. Incentive Reversal may occur in sequential team productions featuring positive external impacts on agents. This seemingly paradoxical event is explained through two experiments in this article. The first experiment involves a sample of ۱۸۲ college students who were paired in groups each playing ۱۲ games that led to ۲,۱۸۴ observations. The second experiment involves a sample of ۲۱۰ college students who were grouped into teams of three that involved ۴۲۰ observations. The results of both experiments confirmed the occurrence of incentive reversals despite increasing monetary rewards.

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Keywords: Incentive Reversal ، Game theory ، Team Production ، Experimental Economics ، Behavioral Economy. JEL Classification: C۹ ، D۲۳ ، J۳۱ ، J۳۳ ، J۴۱ ، M۱۲ ، M۵۲