International College of Economics and Finance

Research seminar by Chaim Fershtman (Tel Aviv University): «Working hard or working smart?»

Chaim Fershtman
Chaim Fershtman
Thursday, November 11 International College of Economics and Finance held the Research seminar.
Venue: Pokrovski Bulvar, 11, Room Zh-822
Speaker: Chaim Fershtman (Tel Aviv University)
Theme: «Working hard or working smart?»

The general intuition is that providing performance-based incentives motivates individuals to increase effort. But many real-life tasks involve combination of efforts; cognitive effort and labor effort. Typically there is a tradeoff between the two types of effort. People may have time constraint or budget constraint and therefore they need to choose the combination of cognitive and labor effort they wish to exert. It is this choice of combination of effort which is the focus of our paper. We use experimental approach to show that Incentives may affect the allocation of cognitive effort and labor effort. In particular we show that strong incentives that encourage individuals to exert more effort lead people to work harder but not necessarily smarter. Moreover our study demonstrates that competitive incentives may also reduce "ability" as it is measured by the success rate of the cognitive task.  
Everyone interested is welcome to attend!


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