The prevailing labour market models assume that minimum wages do not affect the labour supply sch... more The prevailing labour market models assume that minimum wages do not affect the labour supply schedule. We challenge this view in this paper by showing experimentally that minimum wages have significant and lasting effects on subjects’ reservation wages. The temporary introduction of a minimum wage leads to a rise in subjects’ reservation wages that persists even after the minimum wage
Wireless sensor networks are a promising technology for ecological research due to their capabili... more Wireless sensor networks are a promising technology for ecological research due to their capability to make continuous and in-situ measurements. However, there are some challenges for the wide adoption of this technology by scientists, who may have various research focuses. First, the observation system needs to be rapidly and easily deployable at different remote locations. Second, the system needs to
Field evidence suggests that people belonging to the same group often behave similarly, i.e., beh... more Field evidence suggests that people belonging to the same group often behave similarly, i.e., behavior exhibits social interaction effects. We conduct a laboratory experiment that avoids the identification problem present in the field and allows us to study the behavioral logic of social interaction effects. Our novel design feature is that each subject is simultaneously a member of two randomly
In this paper we provide controlled experimental evidence on the interaction of incentive schemes... more In this paper we provide controlled experimental evidence on the interaction of incentive schemes, sorting decisions and performance. In a first sequence of the ex- periment all subjects perform a real effort task under a piece-rate regime. Depending on the treatment they can then choose to work either under a piece-rate scheme or a fixed wage scheme (PR-treatment) or to work either under a tournament incentives or a fixed wage scheme (T-treatment). In both treatments subjects are then going through a series of other treatments to elicit social preferences and risk attitudes. In addition we collect questionnaire data on effort, self-assessment and personality. Our main findings are as follows: First, output is much higher in the variable pay schemes (piece-rate and tournament) compared to the fixed wage schemes. Second, this differ- ence is only in part driven by the different incentives. More important for the outcome differences is the sorting of subjects: the higher the ability t...
A key open question for theories of reference-dependent preferences is what determines the refere... more A key open question for theories of reference-dependent preferences is what determines the reference point. One candidate is expectations: what people expect could affect how they feel about what actually occurs. In a real-effort experiment, we manipulate the rational expectations of subjects and check whether this manipulation influences their effort provision. We find that effort provision is significantly different between
Our decisions often have consequences for other people. Hence, self-interest and other-regarding ... more Our decisions often have consequences for other people. Hence, self-interest and other-regarding motives are traded off in many daily-life situations. Interindividually, people differ in their tendency to behave prosocial. These differences are captured by the concept of social value orientation (SVO), which assumes stable, trait-like tendencies to act selfish or prosocial. This study investigates group differences in prosocial decision making and addresses the question of whether prosocial individuals act intuitively and selfish individuals instead need to control egoistic impulses to behave prosocially. We address this question via the interpretation of neuronal and behavioral indicators. In the present fMRI-study participants were grouped into prosocial- and selfish participants. They made decisions in multiple modified Dictator-Games (DG) that addressed self- and other-regarding motives to a varying extent (self gain, non-costly social gain, mutual gain, costly social gain). Sel...
Apart from everyday duties, such as doing the laundry or cleaning the house, there are tasks we d... more Apart from everyday duties, such as doing the laundry or cleaning the house, there are tasks we do for pleasure and enjoyment. We do such tasks, like solving crossword puzzles or reading novels, without any external pressure or force; instead, we are intrinsically motivated: we do the tasks because we enjoy doing them. Previous studies suggest that external rewards, i.e., rewards from the outside, affect the intrinsic motivation to engage in a task: while performance-based monetary rewards are perceived as controlling and induce a business-contract framing, verbal rewards praising one's competence can enhance the perceived self-determination. Accordingly, the former have been shown to decrease intrinsic motivation, whereas the latter have been shown to increase intrinsic motivation. The present study investigated the neural processes underlying the effects of monetary and verbal rewards on intrinsic motivation in a group of 64 subjects applying functional magnetic resonance imag...
Humans often evaluate their abilities by comparing their personal performance with that of others... more Humans often evaluate their abilities by comparing their personal performance with that of others. For this process, it is critical whether the comparison turns out in one's favor or against it. Here, we investigate how social comparisons of performance are encoded and integrated on the neural level. We collected functional magnetic resonance images while subjects answered questions in a knowledge quiz that was related to their profession. After each question, subjects received a feedback about their personal performance, followed by a feedback about the performance of a reference group who had been quizzed beforehand. Based on the subjects' personal performance, we divided trials in downward and upward comparisons. We found that upward comparisons correlated with activity in the dorsolateral prefrontal cortex and the anterior insula. Downward comparisons were associated with increased activation in the ventral striatum (VS), the medial orbitofrontal cortex and the ventral a...
The prevailing labour market models assume that minimum wages do not affect the labour supply sch... more The prevailing labour market models assume that minimum wages do not affect the labour supply schedule. We challenge this view in this paper by showing experimentally that minimum wages have significant and lasting effects on subjects’ reservation wages. The temporary introduction of a minimum wage leads to a rise in subjects’ reservation wages that persists even after the minimum wage
Wireless sensor networks are a promising technology for ecological research due to their capabili... more Wireless sensor networks are a promising technology for ecological research due to their capability to make continuous and in-situ measurements. However, there are some challenges for the wide adoption of this technology by scientists, who may have various research focuses. First, the observation system needs to be rapidly and easily deployable at different remote locations. Second, the system needs to
Field evidence suggests that people belonging to the same group often behave similarly, i.e., beh... more Field evidence suggests that people belonging to the same group often behave similarly, i.e., behavior exhibits social interaction effects. We conduct a laboratory experiment that avoids the identification problem present in the field and allows us to study the behavioral logic of social interaction effects. Our novel design feature is that each subject is simultaneously a member of two randomly
In this paper we provide controlled experimental evidence on the interaction of incentive schemes... more In this paper we provide controlled experimental evidence on the interaction of incentive schemes, sorting decisions and performance. In a first sequence of the ex- periment all subjects perform a real effort task under a piece-rate regime. Depending on the treatment they can then choose to work either under a piece-rate scheme or a fixed wage scheme (PR-treatment) or to work either under a tournament incentives or a fixed wage scheme (T-treatment). In both treatments subjects are then going through a series of other treatments to elicit social preferences and risk attitudes. In addition we collect questionnaire data on effort, self-assessment and personality. Our main findings are as follows: First, output is much higher in the variable pay schemes (piece-rate and tournament) compared to the fixed wage schemes. Second, this differ- ence is only in part driven by the different incentives. More important for the outcome differences is the sorting of subjects: the higher the ability t...
A key open question for theories of reference-dependent preferences is what determines the refere... more A key open question for theories of reference-dependent preferences is what determines the reference point. One candidate is expectations: what people expect could affect how they feel about what actually occurs. In a real-effort experiment, we manipulate the rational expectations of subjects and check whether this manipulation influences their effort provision. We find that effort provision is significantly different between
Our decisions often have consequences for other people. Hence, self-interest and other-regarding ... more Our decisions often have consequences for other people. Hence, self-interest and other-regarding motives are traded off in many daily-life situations. Interindividually, people differ in their tendency to behave prosocial. These differences are captured by the concept of social value orientation (SVO), which assumes stable, trait-like tendencies to act selfish or prosocial. This study investigates group differences in prosocial decision making and addresses the question of whether prosocial individuals act intuitively and selfish individuals instead need to control egoistic impulses to behave prosocially. We address this question via the interpretation of neuronal and behavioral indicators. In the present fMRI-study participants were grouped into prosocial- and selfish participants. They made decisions in multiple modified Dictator-Games (DG) that addressed self- and other-regarding motives to a varying extent (self gain, non-costly social gain, mutual gain, costly social gain). Sel...
Apart from everyday duties, such as doing the laundry or cleaning the house, there are tasks we d... more Apart from everyday duties, such as doing the laundry or cleaning the house, there are tasks we do for pleasure and enjoyment. We do such tasks, like solving crossword puzzles or reading novels, without any external pressure or force; instead, we are intrinsically motivated: we do the tasks because we enjoy doing them. Previous studies suggest that external rewards, i.e., rewards from the outside, affect the intrinsic motivation to engage in a task: while performance-based monetary rewards are perceived as controlling and induce a business-contract framing, verbal rewards praising one's competence can enhance the perceived self-determination. Accordingly, the former have been shown to decrease intrinsic motivation, whereas the latter have been shown to increase intrinsic motivation. The present study investigated the neural processes underlying the effects of monetary and verbal rewards on intrinsic motivation in a group of 64 subjects applying functional magnetic resonance imag...
Humans often evaluate their abilities by comparing their personal performance with that of others... more Humans often evaluate their abilities by comparing their personal performance with that of others. For this process, it is critical whether the comparison turns out in one's favor or against it. Here, we investigate how social comparisons of performance are encoded and integrated on the neural level. We collected functional magnetic resonance images while subjects answered questions in a knowledge quiz that was related to their profession. After each question, subjects received a feedback about their personal performance, followed by a feedback about the performance of a reference group who had been quizzed beforehand. Based on the subjects' personal performance, we divided trials in downward and upward comparisons. We found that upward comparisons correlated with activity in the dorsolateral prefrontal cortex and the anterior insula. Downward comparisons were associated with increased activation in the ventral striatum (VS), the medial orbitofrontal cortex and the ventral a...
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