Journal of Risk and Uncertainty

, Volume 19, Issue 1–3, pp 7–42 | Cite as

The Effects of Financial Incentives in Experiments: A Review and Capital-Labor-Production Framework

  • Colin F. Camerer
  • Robin M. Hogarth

Abstract

We review 74 experiments with no, low, or high performance-based financial incentives. The modal result has no effect on mean performance (though variance is usually reduced by higher payment). Higher incentive does improve performance often, typically judgment tasks that are responsive to better effort. Incentives also reduce “presentation” effects (e.g., generosity and risk-seeking). Incentive effects are comparable to effects of other variables, particularly “cognitive capital” and task “production” demands, and interact with those variables, so a narrow-minded focus on incentives alone is misguided. We also note that no replicated study has made rationality violations disappear purely by raising incentives.

experimental economics rationality bounded rationality judgment incentives experimental methodology 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Andreoni, James and John H. Miller. (1997). ''Giving According to GARP: An Experimental Study of Rationality and Altruism,'' University of Wisconsin Department of Economics Working Paper, October.Google Scholar
  2. Arkes, Hal R., Robyn M. Dawes, and Caryn Christensen. (1986). ''Factors Influencing the Use of a Decision Rule in a Probabilistic Task,'' Organizational Behavior and Human Decision Processes 37, 93–110.Google Scholar
  3. Ashton, Robert H. (1990). ''Pressure and Performance in Accounting Decision Settings: Paradoxical Effects of Incentives, Feedback, and Justification,'' Journal of Accounting Research 28, 148–180.Google Scholar
  4. Atkinson, John W. (1958). ''Towards Experimental Analysis of Human Motivation in Terms of Motives, Expectancies, and Incentives.'' In John W. Atkinson ed., Motives in Fantasy, Action, and Society.New York: Van Nostrand.Google Scholar
  5. Aumann, Robert. (1990). ''Foreword.'' In Alvin E. Roth and Marilda A. Oliveira Sotomayor ed., Two-Sided Matching:A Study in Game-Theoretic Modeling and Analysis, p. xi. Cambridge, UK: Cambridge University Press.Google Scholar
  6. Awasthi, Vidya and Jamie Pratt. (1990). ''The Effects of Monetary Incentives on Effort and Decision Performance: the Role of Cognitive Characteristics,'' The Accounting Review 65, 797–811.Google Scholar
  7. Bahrick, Harry P. (1954). ''Incidental Learning under Incentive Conditions,'' Journal of Experimental Psychology 47, 170–172.Google Scholar
  8. Baker, S. L. and I. Kirsch. (1991). ''Cognitive Mediators of Pain Perception and Tolerance,'' Journal of Personality and Social Psychology, 61, 504–510.Google Scholar
  9. Ball, Sheryl B. and Paula-Ann Cech. (1996). ''Subject Pool Choice and Treatment Effects in Economic Laboratory Research.'' In R. Mark Isaac ed., Research in Experimental Economics Vol. 6, pp. 139–292. Greenwich, CT: JAI Press.Google Scholar
  10. Battalio, Raymond C., John H. Kagel, and Komain Jiranyakul. (1990). ''Testing between Alternative Models of Choice under Uncertainty,'' Journal of Risk and Uncertainty 3, 25–50.Google Scholar
  11. Baumeister, Roy F. (1984). ''Choking Under Pressure: Self Consciousness and Paradoxical Effects of Incentives on Skillful Performance,'' Journal of Personality and Social Psychology 46, 610–620.Google Scholar
  12. Beattie, Jane and Graham Loomes. (1997). ''The Impact of Incentives upon Risky Choice Experiments,'' Journal of Risk and Uncertainty 14, 155–168.Google Scholar
  13. Binswinger, Hans P. (1980). ''Attitudes Toward Risk: Experimental Measurement in Rural India,'' American Journal of Agricultural Economics 62, 395–407.Google Scholar
  14. Bohm, Peter. (1994). ''Time Preference and Preference Reversal among Experienced Subjects: The Effects of Real Payments,'' The Economic Journal 104, 1370–1378.Google Scholar
  15. Bolle, Friedel. (1990). ''High Reward Experiments without High Expenditure for the Experimenter?'' Journal of Economic Psychology 11, 157–167.Google Scholar
  16. Bonner, Sarah E. S., Mark Young, and Reid Hastie. (1996). ''Financial Incentives and Performance in Laboratory Tasks: The Effects of Task Type and Incentive Scheme Type,'' Unpublished manuscript, University of Southern California Department of Accounting.Google Scholar
  17. Bull, Clive, Andrew Schotter, and Keith Weigelt. (1987). ''Tournaments and Piece Rates: An Experimental Study,'' Journal of Political Economy 95, 1–33.Google Scholar
  18. Camerer, Colin F. (1987). ''Do Biases in Probability Judgment Matter in Markets? Experimental Evidence,'' American Economic Review 77, 981–997.Google Scholar
  19. Camerer, Colin F. (1989). ''An Experimental Test of Several Generalized Utility Theories,'' Journal of Risk and Uncertainty 2, 61–104.Google Scholar
  20. Camerer, Colin F. (1990). ''Behavioral Game Theory.'' In R. Hogarth ed., Insights in Decision Making:Theory and Applications. Chicago: University of Chicago Press, (1990), pp. 311–336.Google Scholar
  21. Camerer, Colin F. (1996). ''Rules for Experimenting in Psychology and Economics, and Why They Differ.'' In W. Guth and E. Van Damme eds., Essays in Honor of Reinhard Selten. New York: Springer-Verlag.Google Scholar
  22. Camerer, Colin F. (1998). ''Behavioral Economics and Nonrational Decision Making in Organizations.'' In J. Halpern and B. Sutton eds., Decision Making in Organizations. Ithaca, NY: Cornell University Press.Google Scholar
  23. Camerer, Colin F. in press. ''Prospect Theory in the Wild: Evidence from the Field.'' In D. Kahneman and A. Tversky eds., Choices, Values, and Frames.Google Scholar
  24. Camerer, Colin F. and Eric Johnson. (1991). ''The Process-Performance Paradox in Expert Judgment: Why Do Experts Know So Much and Predict So Badly?'' In A. Ericsson and J. Smith eds., Toward a General Theory of Expertise: Prospects and Limits, pp. 195–217. Cambridge, UK: Cambridge University Press.Google Scholar
  25. Camerer, Colin F., Eric Johnson, Talia Rymon, and Sankar Sen. (1993). ''Cognition and Framing in Sequential Bargaining.'' In K. Binmore, A. Kirman, and P. Tani eds., Frontiers of Game Theory, Cambridge, MA: MIT Press.Google Scholar
  26. Camerer, Colin F., Teck Ho, and Keith Weigelt. (1997). Unpublished data.Google Scholar
  27. Camerer, Colin F. and Keith Weigelt. (1988). ''Experimental Tests of a Sequential Equilibrium Reputation Model,'' Econometrica 56, 1–36.Google Scholar
  28. Castellan, N. John. (1969). ''Effect of Change of Payoff in Probability Learning,'' Journal of Experimental Psychology 79, 178–182.Google Scholar
  29. Cheng, Patricia and Keith Holyoak. (1985). ''Pragmatic Reasoning Schemas,'' Cognitive Psychology 17, 391–416.Google Scholar
  30. Conlisk, John (1989). ''Three Variants on the Allais Example.'' American Economic Review 79, 392–407.Google Scholar
  31. Cooper, David J., John H. Kagel, Wei Lo, and Qingliang Gu. in press. ''An Experimental Study of the Ratchet Effect: The Impact of Incentives, Context, and Subject Sophistication on Behavior,'' American Economic Review.Google Scholar
  32. Cosmides, Leda. (1985). ''The Logic of Social Exchange: Has Natural Selection Shaped How Humans Reason? Studies with the Wason Selection Task,'' Cognition 31, 187–276.Google Scholar
  33. Cox, James C. and David M. Grether. (1996). ''The Preference Reversal Phenomenon: Response Mode, Markets, and Incentives,'' Economic Theory 7, 381–405.Google Scholar
  34. Craik, Fergus I. M. and Endel Tulving. (1975). ''Depth of Processing and the Retention of Words in Episodic Memory,'' Journal of Experimental Psychology: General 104, 268–294.Google Scholar
  35. Cubitt, Robin P, Chris Starmer, and Robert Sugden. (1998). ''On the Validity of the Random Lottery Incentive System,'' Experimental Economics 1, 115–132.Google Scholar
  36. Cummings, Ronald G., Glenn W. Harrison, and E. Elisabet Rutstrom. (1995). ''Homegrown Values and Hypothetical Surveys: Is the Dichotomous Choice Approach Incentive-Compatible?'' American Economic Review 85, 260–266.Google Scholar
  37. Dawes, R. M., D. Faust and P. E. Meehl. (1989). ''Clinical versus Actuarial Judgment,'' Science 243, 1668–1674.Google Scholar
  38. Dickhaut, John, Kip Smith, Kevin McCabe, Nicole Peck, and Vijay Rajan. (1997). ''The Emotional and Mental Effort Dynamics of the English Auction,'' University of Minnesota Working Paper, Presented at ESA Meeting, September.Google Scholar
  39. Drago, Robert and John S. Heywood. (1989). ''Tournaments, Piece Rates, and the Shape of Payoff Function,'' Journal of Political Economy 97, 992–998.Google Scholar
  40. Edwards, Ward. (1953). ''Probability Preferences in Gambling,'' American Journal of Psychology 66, 349–364.Google Scholar
  41. Edwards, Ward. (1961). ''Probability Learning in 1000Trials,'' Journal of Experimental Psychology 62, 385–394.Google Scholar
  42. Eger, Carol and John Dickhaut. (1982). ''An Examination of the Conservative Information Processing Bias in an Accounting Framework,'' Journal of Accounting Research 20, 711–723.Google Scholar
  43. Eisenberger, R. and J. Cameron. (1996). ''Detrimental Effects of Rewards: Reality or Myth?'' American Psychologist, 51, 1153–1166.Google Scholar
  44. El-Gamal, Mahmoud and Thomas R. Palfrey. (1996). ''Economical Experiments: Bayesian Efficient Experimental Design.'' International Journal of Game Theory, 25, 476–495.Google Scholar
  45. Ericsson, K. Anders and Jacqui Smith. eds. (1991). Toward a General Theory of Expertise: Prospects and Limits. Cambridge, UK: Cambridge University Press.Google Scholar
  46. Fehr, Ernst and Elena Tougareva. (1996). ''Do High Monetary Stakes Remove Reciprocal Fairness? Experimental Evidence from Russia,'' University of Zurich Working Paper.Google Scholar
  47. Fiorina, Morris P. and Charles R. Plott. (1978). ''Committee Decisions under Majority Rule: An Experimental Study,'' American Political Science Review 72, 575–598.Google Scholar
  48. Forsythe, Robert, Joel L. Horowitz, N. E. Savin, and Martin Sefton. (1994). ''Fairness in Simple Bargaining Experiments,'' Games and Economic Behavior 6, 347–369.Google Scholar
  49. Fouraker, Lawrence and Sidney Siegel. (1963). Bargaining and Group Decision Making. New York: McGraw-Hill.Google Scholar
  50. Friedman, Daniel. (1998). ''Monty Hall's Three Doors: Construction and Deconstruction of a Choice Anomaly,'' American Economic Review 88, 933–946.Google Scholar
  51. Glucksburg, Sam. (1962). ''The Influence of Strength and Drive on Functional Fixedness and Perceptual Recognition,'' Journal of Experimental Psychology 63, 36–41.Google Scholar
  52. Grether, David. M. (1980). ''Bayes' Rule as a Descriptive Model: The Representativeness Heuristic,'' Quarterly Journal of Economics 95, 537–557.Google Scholar
  53. Grether, D. M. (1981). ''Financial Incentive Effects and Individual Decision Making,'' California Institute of Technology Working Paper No. 401.Google Scholar
  54. Grether, D. M. (1990). ''Testing Bayes Rule and the Representativeness Heuristic: Some Experimental Evidence,'' Journal of Economic Behavior and Organization 17, 31–57.Google Scholar
  55. Grether, David M. and Charles R. Plott. (1979). ''Economic Theory of Choice and the Preference Reversal Phenomenon,'' American Economic Review 69, 623–638.Google Scholar
  56. Guth, Werner, R. Schmittberger, and B. Schwarze. (1982). ''An Experimental Analysis of Ultimatum Bargaining,''Journal of Economic Behavior and Organization 3, 367–388.Google Scholar
  57. Harless, David W. and Colin F. Camerer. (1994). ''The Predictive Utility of Generalized Expected Utility Theories,'' Econometrica 62, 1251–1290.Google Scholar
  58. Harrison, Glenn W. (1994). ''Expected Utility Theory and the Experimentalists,'' Empirical Economics 19, 223–253.Google Scholar
  59. Harrison, Glenn W. and E. Elisabet Rutstrom. in press. ''Experimental Evidence of Hypothetical Bias in Value Elicitation Methods.'' In C. R. Plott and V. L. Smith eds., Handbook of Experimental Economics Results.Google Scholar
  60. Hertwig, Ralph and Andreas Ortmann. in press. ''Experimental Practices in Economics: A Methodological Challenge for Psychologists,'' Behavioral and Brain Sciences.Google Scholar
  61. Hey, John D. (1982). ''Search for Rules of Search,'' Journal of Economic Behavior and Organization 3, 65–81.Google Scholar
  62. Hey, John D. (1987). ''Still Searching,'' Journal of Economic Behavior and Organization 8, 137–144.Google Scholar
  63. Hoffman, Elizabeth, Kevin McCabe, and Vernon Smith. (1996a). ''On Expectations and Monetary Stakes in Ultimatum Games,'' International Journal of Game Theory 25, 289–301.Google Scholar
  64. Hoffman, Elizabeth, Kevin McCabe, and Vernon L. Smith. (1996b). ''Social Distance and Other-Regarding Behavior in Dictator Games,'' American Economic Review 86, 653–660.Google Scholar
  65. Hogarth, Robin M. and Hillel J. Einhorn. (1990). ''Venture Theory: A Model of Decision Weights,'' Management Science 36, 780–803.Google Scholar
  66. Hogarth, Robin M., Brian J. Gibbs, Craig R. M. McKenzie, and Margaret A. Marquis. (1991). ''Learning from Feedback: Exactingness and Incentives,'' Journal of Experimental Psychology: Learning, Memory and Cognition 17, 734–752.Google Scholar
  67. Irwin, Julie R., Gary H. McClelland, and William D. Schulze. (1992). ''Hypothetical and Real Consequences in Experimental Auctions for Insurance against Low-Probability Risks,'' Journal of Behavioral Decision Making 5, 107–116.Google Scholar
  68. Irwin, Julie, Michael McKee, Gary McClelland, William Schulze, and Elizabeth Norden. in press.''Payoff Dominance vs. Cognitive Transparency in Decision Making,'' Economic Inquiry.Google Scholar
  69. Jamal, Karim and Shyam Sunder. (1991). ''Money vs. Gaming: Effects of Salient Monetary Payments in Double Oral Auctions,'' Organizational Behavior and Human Decision Processes 49, 151–166.Google Scholar
  70. Jenkins, G. Douglas, Jr., Atul Mitra, Nina Gupta, and Jason D. Shaw. (1998). ''Are Financial Incentives Related to Performance? A Meta-Analytic Review of Empirical Research,'' Journal of Applied Psychology 83, 777–787.Google Scholar
  71. Johannesson, Magnus, Bengt Liljas, and Per-Olov Johansson. (1998). ''An Experimental Comparison of Dichotomous Choice Contingent Valuation Questions and Real Purchase Decisions,'' Applied Economics, 30, 643–647.Google Scholar
  72. Kachelmeier, Steven J. and Mohamed Shehata. (1992). ''Examining Risk Preferences under High Monetary Incentives: Experimental Evidence from the People's Republic of China,'' American Economic Review 82, 1120–1141.Google Scholar
  73. Kagel, John H. and Dan Levin. (1986). ''The Winner's Curse and Public Information in Common Value Auctions,'' American Economic Review 76, 894–920.Google Scholar
  74. Kahneman, Daniel and W. Scott Peavler. (1969). ''Incentive Effects and Pupillary Changes in Association Learning,'' Journal of Experimental Psychology 79, 312–318.Google Scholar
  75. Kahneman, Daniel, W. Scott Peavler, and Linda Onuska. (1968). ''Effects of Verbalization and Incentive on the Pupil Response to Mental Activity,'' Canadian Journal of Psychology 22, 186–196.Google Scholar
  76. Kroll, Y., H. Levy, and A. Rapoport. (1988). ''Experimental Tests of the Separation Theorem and the Capital Asset Pricing Model,'' American Economic Review 78, 500–519.Google Scholar
  77. Kroll, Y., H. Levy, and A. Rapaport. (1988). ''Experimental Tests of the Mean-Variance Model for Portfolio Selection,'' Organizational Behavior and Human Decision Processes 42, 388–410.Google Scholar
  78. Lepper, Mark R., David Greene, and Richard E. Nisbett. (1973). ''Undermining Childrens' Intrinsic Interest in with Extrinsic Reward: A Test of the 'Overjustification' Hypothesis,'' Journal of Personality and Social Psychology 28, 129–137.Google Scholar
  79. Libby, Robert and Marlys G. Lipe. (1992). ''Incentives, Effort, and the Cognitive Processes Involved in Accounting-Related Judgments,'' Journal of Accounting Research 30, 249–273.Google Scholar
  80. List, John A. and Jason F. Shogren. (1998). ''The Deadweight Loss of Christmas: Comment,'' American Economic Review 88, 1350–1355.Google Scholar
  81. Loomes, Graham and Caron Taylor. (1992). ''Non-Transitive Preferences over Gains and Losses,'' Economic Journal 102, 357–365.Google Scholar
  82. McGraw, Kenneth O. and John C. McCullers. (1979). ''Evidence of a Detrimental Effect of Extrinsic Incentives on Breaking a Mental Set,'' Journal of Experimental Social Psychology 15, 285–294.Google Scholar
  83. McKelvey, Richard and Ordeshook, Peter. (1988)''A Decade of Experimental Research on Spatial Models of Elections and Committees.'' In M. J. Hinich and J. Enelow eds., Government, Democracy, and Social Choice. Cambridge, MA: Cambridge University Press.Google Scholar
  84. McKelvey, Richard and Thomas Palfrey. (1992). ''An Experimental Study of the Centipede Game,'' Econometrica 60, 803–836.Google Scholar
  85. Merlo, Antonio and Andrew Schotter. (1999). ''A Surprise-Quiz View of Learning in Economic Experiments,'' Games and Economic Behavior 28, 25–54.Google Scholar
  86. Miller, Louise B. and Betsy W. Estes. (1961). ''Monetary Reward and Motivation in Discrimination Learning,'' Journal of Experimental Psychology 61, 501–504.Google Scholar
  87. Muller, W. G. and A. M. C. Ponce de Leon. (1996). ''Optimal Design of an Experiment in Economics,'' ¨ Economic Journal 106, 122–127.Google Scholar
  88. Neelin, Janet [now Currie], Hugo Sonnenschein, and Matthew Spiegel. (1988). ''A Further Test of Noncooperative Bargaining Theory: Comment,'' American Economic Review 78, 824–836.Google Scholar
  89. Nilsson, Lars-Goran. (1987). ''Motivated Memory: Dissociation between Performance Data and Subjective Reports,'' Psychological Research 49, 183–188.Google Scholar
  90. Phillips, Lawrence D. and Ward Edwards. (1966). ''Conservatism in a Simple Probability Inference Task,'' Journal of Experimental Psychology 72, 346–354.Google Scholar
  91. Prasnikar, Vesna. (1998). ''How Well Does Utility Maximization Approximate Subjects' Behavior? An Experimental Study,'' University of Pittsburgh Department of Economics, December.Google Scholar
  92. Prendergast, Canice. in press. ''The Provision of Incentives in Firms,'' Journal of Economic Literature.Google Scholar
  93. Reber, Arthur S. (1989). ''Implicit Learning and Tacit Knowledge,'' Journal of Experimental Psychology: General 118, 219–235.Google Scholar
  94. Riedel, James A., Delbert M. Nebeker, and Barrie L. Cooper. (1988). ''The Influence of Monetary Incentive on Goal Choice, Goal Commitment, and Task Performance,'' Organizational Behavior and Human Decision Processes 42, 155–180.Google Scholar
  95. Roth, Alvin E., Vesna Prasnikar, Masahiro Okuno-Fujiwara, and Shmuel Zamir. (1991). ''Bargaining and Market Behavior in Jerusalem, Ljubljana, Pittsburgh and Tokyo: An Experimental Study,'' American Economic Review 81, 1068–1095.Google Scholar
  96. Salthouse, Timothy A., Janice D. Rogan, and Kenneth A. Prill. (1984). ''Division of Attention: Age Differences on a Visually Presented Memory Task,'' Memory and Cognition 12, 613–620.Google Scholar
  97. Samuelson, William F. and Max H. Bazerman. (1985). ''The Winner's Curse in Bilateral Negotiations,'' Research in Experimental Economics 3, 105–137.Google Scholar
  98. Schoemaker, Paul J. H. (1990). ''Are Risk Attitudes Related across Domains and Response Modes?'' Management Science 36, 1451–1463.Google Scholar
  99. Schwartz, Barry. (1982). ''Reinforcement-Induces Behavioral Stereotypy: How Not to Teach People to Discover Rules,'' Journal of Experimental Psychology: General 111, 23–59.Google Scholar
  100. Scott, W. E., Jing-Lih Farh, and Philip M. Podsakoff. (1988). ''The Effects of 'Intrinsic' and 'Extrinsic' Reinforcement Contingencies on Task Behavior,'' Organizational Behavior and Human Decision Processes 41, 405–425.Google Scholar
  101. Sefton, Martin. (1992). ''Incentives in Simple Bargaining Games,'' Journal of Economic Psychology 13, 263–276.Google Scholar
  102. Selten, Reinhard, A. Sadrieh, and Klaus Abbink. (1995). ''Money Does Not Induce Risk Neutral Behavior, but Binary Lotteries Do Even Worse,'' University of Bonn Working Paper No. B-343.Google Scholar
  103. Siegel, Sidney and Lawrence Fouraker. (1960). Bargaining and Group Decision Making: Experiments in Bilateral Monopoly. New York: McGraw-Hill.Google Scholar
  104. Siegel, Sidney, Alberta Siegel, and Julia Andrews. (1964). Choice, Strategy, and Utility. New York: McGraw-Hill.Google Scholar
  105. Slonim, Robert and Alvin E. Roth. (1998). ''Learning in High Stakes Ultimatum Games: An Experiment in the Slovak Republic,'' Econometrica, 65, 569–596.Google Scholar
  106. Slovic, Paul. (1969). ''Differential Effects of Real versus Hypothetical Payoffs on Choices among Gambles,'' Journal of Experimental Psychology 80, 434–437.Google Scholar
  107. Slovic, Paul and Douglas MacPhillamy. (1974). ''Dimensional Commensurability and Cue Utilization in Comparative Judgment,'' Organizational Behavior and Human Performance 11, 172–194.Google Scholar
  108. Smith, Vernon L. (1962). ''An Experimental Study of Competitive Market Behavior,'' Journal of Political Economy 70, 111–137.Google Scholar
  109. Smith, Vernon L. (1965). ''Experimental Auction Markets and the Walrasian Hypothesis,'' Journal of Political Economy 387–393.Google Scholar
  110. Smith, Vernon L. (1976). ''Experimental Economics: Induced Value Theory,'' American Economic Review 66, 274–279.Google Scholar
  111. Smith, Vernon L. (1991). ''Experimental Economics: Behavioral Lessons for Microeconomic Theory and Policy,'' (1990)Nancy Schwartz Lecture, KGSM, Northwestern University.Google Scholar
  112. Smith, Vernon L., Gerry Suchanek, and Arlington Williams. (1988). ''Bubbles, Crashes, and Endogenous Expectations in Experimental Spot Asset Markets,'' Econometrica 56, 1119–1151.Google Scholar
  113. Smith, Vernon L. and James M. Walker. (1993). ''Rewards, Experience and Decision Costs in First Price Auctions,'' Economic Inquiry 31, 237–244.Google Scholar
  114. Sniezek, Janet A. (1986). ''The Role of Variable Labels in Cue Probability Learning Tasks,'' Organizational Behavior and Human Decision Processes 38, 141–161.Google Scholar
  115. Straub, Paul G. and J. Keith Murnighan. (1995). ''An Experimental Investigation of Ultimatum Games: Information, Fairness, Expectations, and Lowest Acceptable Offers,'' Journal of Economic Behavior and Organization 27, 345–364.Google Scholar
  116. Tversky, Amos and Daniel Kahneman. (1992). ''Advances in Prospect Theory: Cumulative Representation of Uncertainty,'' Journal of Risk and Uncertainty 5, 297–323.Google Scholar
  117. Van Huyck, John, Raymond Battalio, and Richard Beil. (1990). ''Tacit Coordination Games, Strategic Uncertainty, and Coordination Failure,'' American Economic Review 80, 234–248.Google Scholar
  118. Wallsten, Thomas S., David V. Budescu, and Rami Zwick. (1993). ''Comparing the Calibration and Coherence of Numerical and Verbal Probability Judgments,'' Management Science 39, 176–190.Google Scholar
  119. Weber, Elke, Sharoni Shafir, and Ann-Renee Blais. (1998). ''Predicting Risk-Sensitivity in Humans and Lower Animals: Risk as Variance or Coefficient of Variation,'' Ohio State University Department of Psychology Working Paper.Google Scholar
  120. Weber, Martin, Graham Loomes, Hans-Jurgen Keppe, and Gabriela Meyer-Delius. in press. ''The Impact of Endowment Framing on Market Prices: An Experimental Analysis,'' Journal of Economic Behavior and Organization.Google Scholar
  121. Wilcox, Nathaniel. (1993). ''Lottery Choice: Incentives, Complexity, and Decision Time,'' Economic Journal 103, 1397–1417.Google Scholar
  122. Wright, William F. and Mohamed E. Aboul-Ezz. (1988). ''Effects of Extrinsic Incentives on the Quality of Frequency Assessments,'' Organizational Behavior and Human Decision Processes 41, 143–152.Google Scholar
  123. Wright, William F. and Urton Anderson. (1989). ''Effects of Situation Familiarity and Financial Incentives on Use of the Anchoring and Adjustment Heuristic for Probability Assessment,'' Organizational Behavior and Human Decision Processes 44, 68–82.Google Scholar
  124. Yerkes, R. M. and J. D. Dodson. (1908). ''The Relation of Strength of Stimulus to Rapidity of Habit-Formation,'' Journal of Comparative and Neurological Psychology 18, 459–482.Google Scholar

Copyright information

© Kluwer Academic Publishers 1999

Authors and Affiliations

  • Colin F. Camerer
    • 1
  • Robin M. Hogarth
    • 2
  1. 1.Division of Humanities and Social Sciences 228-77California Institute of TechnologyPasadena
  2. 2.University of ChicagoChicago

Personalised recommendations