Natalia Montinari (University of Lund) on "Incentive Spillovers on Voluntary Cooperation"

We test, in three different locations, the impact of incentives on social preferences by analyzing decisions in two parallel, unrelated games with different matching partners. One game always involves a team incentive. The incentives in the other game vary across out three main treatments: in the first treatment participants experience another team incentive; in the second treatment they are confronted with a piece rate incentive scheme while in the last one they compete in a tournament. In all three locations, we observe a large decline in the effort exerted in the team when subjects play a tournament in parallel compared to the treatment in which subjects are confronted with two identical team incentives. Moreover, the decline of effort we observe in the team is not compensated by the high effort exerted in the tournament. We find that also the piece rate incentive scheme has a negative effect on team cooperation, but it is less stable across locations. We run a set of additional treatments to disentangle to which extent the reduction in cooperation can be explained by cognitive spillovers across games, by a changes in subject’s beliefs or by a change in preferences for cooperation. Our results are not entirely consistent with cognitive spillovers and they show that the incentives do not affect preferences. We suggest that incentive schemes differ in their priming effects, which in turn induce a higher coordination failure in the team contribution.