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Formulation of Hypotheses

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Part of the book series: Contributions to Management Science ((MANAGEMENT SC.))

Abstract

Based on the integrative framework (Chap. 2) and the experimental design (Chap. 3) specific expectations about the participants’ behavior in the study are formulated. The hypotheses formulation is structured according to the three main objectives: disentangling incentive and sorting effects (Sect. 4.1), analyzing contingencies of incentive effects (Sect. 4.2) and analyzing contingencies of sorting effects (Sect. 4.3). The formulation of the hypotheses is based on empirical evidence of related literature, theories from connected research fields as well as conceptual considerations based on a simple utility model using general agency theory assumptions. The variables addressed have been identified in the previous chapters to be necessary for considering incentive and sorting issues (i.e. magnitude of incentive and freedom of choice) or to be interesting to observe because of gaps in existing literature (contingencies of the effects). There are two main outcome variables: productivity levels as well as contracts selected (also referred to as magnitude of incentive in the contract selected). The productivity levels are addressed in Sects 4.1 and 4.2, the influences on the contracts selected, which differ in magnitude of incentive level, are analyzed in Sect. 4.3.

we may define a cause to be an object followed by another,

and where all the objects, similar to the first, are followed by objects similar to the second. Or, in other words, where, if the first object had not been, the second never had existed.

David Hume (1711 Edinburgh – 1776 Edinburgh)

Hume (1825), p. 77 available on http://www.forgottenbooks.org, current 30. October 2010; Refer to Lewis (1973), p. 556 for a discussion of causation in a philosophical context.

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Notes

  1. 1.

    Cf. Bonner and Sprinkle (2002); Sprinkle and Williamson (2007).

  2. 2.

    Cf. Jensen and Meckling (1976); Fama (1980); Bamberg and Ballwieser (1987); Baiman (1990); Lambert (2007).

  3. 3.

    Cf. Demski and Feltham (1978).

  4. 4.

    Cf. Wright and Aboul-Ezz (1988), p. 143; Waller and Bishop (1990); van Dijk et al. (2001); Cadsby et al. (2007).

  5. 5.

    Cf. Awashti and Pratt (1990); Pokorny (2008).

  6. 6.

    Cf. Ashton (1990); Gächter et al. (2001).

  7. 7.

    Cf. Ashton and Ashton (1995b); Prendergast (1999); Bonner et al. (2000); Libby et al. (2002); Bonner and Sprinkle (2002); Sprinkle (2003); Bonner (2008) and Camerer and Hogarth (1999).

  8. 8.

    Cf. Shearer (2004), p. 514.

  9. 9.

    Cf. Paarsch and Shearer (2000); Paarsch and Shearer (2007); Paarsch and Shearer (2009).

  10. 10.

    Cf. Ashton and Ashton (1995b); Camerer and Hogarth (1999); Prendergast (1999); Bonner et al. (2000); Bonner and Sprinkle (2002); Libby et al. (2002); Sprinkle (2003); Bonner (2008).

  11. 11.

    Cf. Gneezy and Rustichini (2000).

  12. 12.

    Refer for example to Ashton and Ashton (1995b); Prendergast (1999); Bonner et al. (2000); Libby et al. (2002); Bonner and Sprinkle (2002); Sprinkle (2003); Bonner (2008) or Camerer and Hogarth (1999).

  13. 13.

    Cf. Camerer and Hogarth (1999), p. 21.

  14. 14.

    Cf. Lazear (2004), pp. 6ff.

  15. 15.

    Cf. Chow (1983).

  16. 16.

    Studies which draw on Chow (1983) are Waller and Chow (1985); Shields and Waller (1988); Shields et al. (1989); Farh et al. (1991); Mauldin (2003) or Hyatt and Taylor (2008) as well as the underlying study.

  17. 17.

    Cf. Lazear (2000).

  18. 18.

    Cf. Banker et al. (2001), p. 318.

  19. 19.

    Cf. Banker et al. (2001).

  20. 20.

    Cf. Román (2009), p. 614.

  21. 21.

    The terms ability and skill are used interchangeably.

  22. 22.

    Cf. Lazear (2004), p. 21.

  23. 23.

    Cf. http://dictionary.cambridge.org/, current 5. March 2010.

  24. 24.

    Because of the importance attributed to individuals’ skill by labor economics in their explanation of sorting effects, Sect. 4.3 deals with that issue in directly testing skill and other endogenous factors of the self-selection process.

  25. 25.

    Cf. Carrell and Dittrich (1978); Birnberg et al. (2007), p. 119; When the self-selection possibility is seen as a form of participation, there is a participation literature to draw on. As the impact of participation on performance is rather equivocal, this literature is not regarded in the present text. Refer to Cotton et al. (1988); Leana et al. (1990) and Cotton et al. (1990) for a discursive debate about the effects of participation in organizations. Refer to Wagner III et al. (1997) or Derfuss (2009) for meta-analyses on the effect of budgetary participation and to Schweiger and Leana (1986) for a review on participation and decision making incorporating methodological issues. Concerning experiments refer to Young (1985) for an early experiment about participative budgeting, Erez et al. (1985) for studies concerning participation and goal-setting, and Wynder (2008) for an experiment on participation and continuous improvement programs.

  26. 26.

    Cf. Farh et al. (1991), p. 61.

  27. 27.

    Cf. Lazear (2000), p. 1352.

  28. 28.

    Cf. Bonner and Sprinkle (2002), pp. 314f.

  29. 29.

    Cf. Hackman and Oldham (1976), p. 256; Refer to Roberts and Glick (1981) for a critical review on the job characteristics model.

  30. 30.

    Cf. Hackman and Oldham (1976), pp. 250ff.

  31. 31.

    Cf. Dodd and Ganster (1996), p. 336.

  32. 32.

    Cf. Camerer (1995), p. 652; Simnett (1996); Bonner and Sprinkle (2002), p. 319; Fessler (2003), pp. 161ff.; Bailey and Fessler (2008), p. 4; For a comprehensive review of task variables in accounting research refer to Bonner (2008), pp. 157ff.

  33. 33.

    Cf. Vandegrift and Brown (2003).

  34. 34.

    Cf. Bailey and Fessler (2008).

  35. 35.

    It shall be noted that some agency models do account for pleasure workers may perceive through work. For instance, Holmstrom and Milgrom (1991), pp. 33f. assume that work may induce pleasure up to some limit. Thus, incentives are only required to spur effort beyond that limit and effort is also exerted in fixed pay contracts.

  36. 36.

    Herzberg et al. (1959), p. 114.

  37. 37.

    Cf. Frey and Oberholzer-Gee (1997), pp. 746ff.

  38. 38.

    Cf. Mawhinney (1979), pp. 411ff.

  39. 39.

    Cf. Frey (1997), pp. 20ff.; Frey and Oberholzer-Gee (1997), pp. 746ff.

  40. 40.

    Cf. Gneezy and Rustichini (2000), p. 794.

  41. 41.

    Gneezy and Rustichini (2000), p. 791.

  42. 42.

    Cf. Sliwka (2003), p. 300.

  43. 43.

    Cf. Brunstein and Heckhausen (2006).

  44. 44.

    Gerhart and Rynes (2003), p. 161.

  45. 45.

    Cf. von Rosenstiel (1999), p. 48; Heckhausen und Heckhausen (2006), pp. preface.

  46. 46.

    Cf. Staehle et al. (1999), p. 218.

  47. 47.

    Cf. Pinder (2008), pp. 1f.

  48. 48.

    Cf. Mehrabian (1969); Brunstein and Heckhausen (2006).

  49. 49.

    Cf. Rheinberg et al. (2001).

  50. 50.

    Current motivation is a rather dynamic interpretation of motivation and not a relatively stable trait, as need for achievement or need for cognition.

  51. 51.

    Cf. Cacioppo and Petty (1982); Bless et al. (1994).

  52. 52.

    In this sense, most personality attributes which explain behavior (including locus of control or risk) can be seen as motivation-related.

  53. 53.

    This distinction is drawn in analogy to Staehle et al. (1999), p. 163’s classification of determinants of human behavior, which can adopt a holistic or an analytic perspective.

  54. 54.

    Cf. Heckhausen (2006), pp. 3f.

  55. 55.

    Cf. Atkinson (1964); Weiner (1996), pp. 180ff.

  56. 56.

    Refer to Weiner (1996), pp. 168ff. for a comprehensive review of Atkinson (1957)’s and Atkinson (1964)’s theory of achievement motivation.

  57. 57.

    Weiner (1996), p. 201.

  58. 58.

    The theory, as indicated by the statement, rather predicts the selection of goals, whereas goal-setting theory rather describes the realization of goals. For a discussion refer to Beckmann and Heckhausen (2006), p. 173.

  59. 59.

    Cf. Lowell (1952), p. 39.

  60. 60.

    Cf. Vecchio (1982), p. 458.

  61. 61.

    Refer to Mawhinney (1979), pp. 411ff. for a review of the interaction of incentives (extrinsic motivation) and motivation (intrinsic motivation) in performance situations. Refer to Frey (1997), pp. 23ff. for conditions based on which monetary rewards crowd out intrinsic motivation.

  62. 62.

    1 refers to \( {{\mathrm{ W}}_{\mathrm{ F}}} \), 2 refers to \( {{\mathrm{ W}}_{\mathrm{ P}}} \) and 3 refers to \( {{\mathrm{ W}}_{\mathrm{ B}}} \).

  63. 63.

    The assumption of a one to one relationship between pay and utility might not be realistic, but is used for simplicity reason.

  64. 64.

    Assuming individuals’ complete work aversion.

  65. 65.

    Cf. Lowell (1952), p. 39; Vecchio (1982), p. 458.

  66. 66.

    Cf. Atkinson and Litwin (1960) drawn from Brunstein and Heckhausen (2006), pp. 165 ff.

  67. 67.

    Cf. Locke and Latham (1990).

  68. 68.

    Cf. Kleinbeck (2006), p. 258.

  69. 69.

    Cf. Cacioppo and Petty (1982).

  70. 70.

    Cf. Priester and Petty (1995).

  71. 71.

    Cf. Gulgoz (2001); Refer to Cacioppo et al. (1996) for a review of need for cognition and its relation to performance.

  72. 72.

    Cf. Staehle et al. (1999), p. 166.

  73. 73.

    Cf. Heckhausen (1980), p. 34.

  74. 74.

    Cf. von Rosenstiel (1999), pp. 50 f.

  75. 75.

    Cf. Rheinberg et al. (2001), p. 57.

  76. 76.

    Cf. Rheinberg et al. (2001), p. 58.

  77. 77.

    Cf. Iyer et al. (2010), p. 1.

  78. 78.

    Cf. Rheinberg et al. (2001).

  79. 79.

    Cf. Vecchio (1982), p. 458; Bonner and Sprinkle (2002), p. 318.

  80. 80.

    Cf. Rotter (1966), p. 1; Weiner (1996), p. 203.

  81. 81.

    Cf. Lewin (1946); Atkinson (1957) cited in Weiner (1996), pp. 204, 207.

  82. 82.

    Cf. Rotter et al. (1972), p. 14.

  83. 83.

    Cf. Krampen (1979), p. 574.

  84. 84.

    Cf. Weiner (1996), pp. 204 ff.

  85. 85.

    Refer to Phares (1972), pp. 436ff. or Weiner (1996), p. 204 for an introduction to such methods used in psychotherapy.

  86. 86.

    Cf. Rotter (1966), p. 1; Krampen (1982), pp. 1ff.; Weiner (1996), pp. 202ff., 212f.

  87. 87.

    Cf. Rotter et al. (1972), p. 39.

  88. 88.

    Cf. Levenson (1974); Dollinger and Taub (1977); Krampen (1979); Krampen (1982); Krampen (1989); Refer to Ammon (2006), pp. 98ff. for a recent review of the locus of control concept.

  89. 89.

    Cf. Mitchell et al. (1975), p. 629.

  90. 90.

    Cf. Brownell (1981), p. 844.

  91. 91.

    Cf. Krampen (1982), pp. 157f.

  92. 92.

    Pride on one’s own goal achievement is captured as an element of current motivation in the study.

  93. 93.

    Cf. Levenson (1974).

  94. 94.

    Anxiety is captured as an element of current motivation in the study.

  95. 95.

    Cf. Dollinger and Taub (1977), p. 124.

  96. 96.

    Cf. Dollinger and Taub (1977), p. 120.

  97. 97.

    Cf. Spector (1982), p. 486; Ammon (2006), p. 106.

  98. 98.

    Cf. Mendelsohn and O‘Brien (1974), p. 566.

  99. 99.

    Cf. Bonner et al. (2000), p. 24.

  100. 100.

    According to Bonner et al. (2000), p. 24 and Hyatt and Taylor (2008), p. 43 most tasks in the underlying research area consist of decoding letters, which can be classified as production and clerical task (level three complexity).

  101. 101.

    Cf. Spector (1982), p. 486.

  102. 102.

    The model extends Dohmen and Falk (2006), pp. 13ff.’s model by including a budget-based contract and by introducing additional individual attributes.

  103. 103.

    1 refers to \( {{\mathrm{ W}}_{\mathrm{ F}}} \), 2 refers to \( {{\mathrm{ W}}_{\mathrm{ P}}} \) and 3 refers to \( {{\mathrm{ W}}_{\mathrm{ B}}} \).

  104. 104.

    In \( {{\mathrm{ C}}_1}({{\mathrm{ e}}^{*}}) \) of the underlying experiment, \( {{\mathrm{ e}}^{*}} \) theoretically captures the effort of staying in the classroom and remaining actionless for the 10 minutes work period.

  105. 105.

    This might be the case if the consideration of the first two thresholds \( {\uppi^{{{{\mathrm{ T}}_1}}}} \) and \( {\uppi^{{{{\mathrm{ T}}_2}}}} \) does not favor the piece rate contract.

  106. 106.

    Cf. Bonner and Sprinkle (2002), p. 315.

  107. 107.

    The interplay of job characteristics and compensation choices is also regarded in Huber et al. (1987) or Saks et al. (1994).

  108. 108.

    Cf. Demski and Feltham (1978), p. 339.

  109. 109.

    Cf. Dohmen and Falk (2011); Chow (1983); Waller and Chow (1985); Shields and Waller (1988); Shields et al. (1989); Lazear (2000); Barro and Beaulieu (2003); Mauldin (2003); Bellemare and Shearer (2006); Eriksson et al. (2009).

  110. 110.

    Cf. Vecchio (1982).

  111. 111.

    Bonner and Sprinkle (2002), p. 318.

  112. 112.

    Cf. Atkinson and Litwin (1960).

  113. 113.

    Cf. Hyatt and Prawitt (2001).

  114. 114.

    Cf. Jurkun (1978), pp. 75 ff.

  115. 115.

    Cf. Jurkun (1978), p. 76.

  116. 116.

    Cf. Jurkun (1978), p. 175.

  117. 117.

    Cf. Jurkun (1978), p. 184.

  118. 118.

    Cf. Jurkun (1978), p. 166.

  119. 119.

    Cf. Leblanc and Tolor (1972).

  120. 120.

    Several other factors, which relate to locus of control differences of specific worker groups, have been described in Jurkun (1978). In the artificial experimental environment these factors are assumed away.

  121. 121.

    Cf. Ammon (2006), p. 106.

  122. 122.

    Spector (1982), p. 486.

  123. 123.

    Cf. Demski and Feltham (1978); Shields et al. (1989); Baiman (1990); Bellemare and Shearer (2006); Lambert (2007).

  124. 124.

    Cf. Bamberg and Coenenberg (2002), p. 95; When the terms ‘risk’ and ‘uncertainty’ are distinguished, risk involves the existence of objective probabilities of states, whereas uncertainty indicates the absence of objective probabilities (Knight (2005), pp. 197ff.). However, since in reality economic subjects often base their decisions on subjective expected probabilities and in the present experiment the participants process their decisions based on subjective judgments as well, no distinction between the terms risk and uncertainty will be made and the terms will be used interchangeably as it is done in Eisenführ and Weber (1993), p. 18 or Sorger (2000), p. 12 as well. Tyszka and Zaleskiewicz (2006)’s findings underline the subjective approach individuals take when dealing with uncertain decisions in a natural environment. They find that in naturalistic scenarios people ask (the experimenter) less questions about probabilities and outcomes than in rather artificial scenarios. The underlying study is natural in a way that it is a real effort and real decision experiment.

  125. 125.

    Cf. Chow (1983); Waller and Chow (1985); Hyatt and Taylor (2008).

  126. 126.

    Hyatt and Taylor (2008), p. 42.

  127. 127.

    Cf. Chow (1983).

  128. 128.

    Studies which draw on Chow (1983) are Waller and Chow (1985); Shields and Waller (1988); Shields et al. (1989); Farh et al. (1991); Mauldin (2003) or Hyatt and Taylor (2008).

  129. 129.

    Cf. Ackerberg and Botticini (2002).

  130. 130.

    Cf. Dohmen and Falk (2006).

  131. 131.

    Cf. Allais (1953); Ellsberg (1961); Morrison (1967); Thaler and Johnson (1990); Schunk and Betsch (2006).

  132. 132.

    Cf. Kahneman and Tversky (1979).

  133. 133.

    Cf. Kahneman and Tversky (1979), p. 268.

  134. 134.

    Cf. MacCrimmon and Wehrung (1985b), p. 1; Trimpop (1994), pp. 16ff.

  135. 135.

    Cf. Huber et al. (2009), p. 17.

  136. 136.

    Cf. Williams and Voon (1999).

  137. 137.

    Williams et al. (2008), p. 60.

  138. 138.

    Refer to Williams and Noyes (2007), pp. 3f. for a current review of risk perception.

  139. 139.

    Cf. Bettman (1973), p. 189.

  140. 140.

    Cf. Slovic (1987); Slovic (2007).

  141. 141.

    Cf. Slovic (1987), p. 285.

  142. 142.

    Cf. Slovic (1987), p. 283.

  143. 143.

    Cf. Slovic (1987), p. 281.

  144. 144.

    Cf. MacCrimmon and Wehrung (1984a), pp. 380f.; Refer to Das and Teng (2001) for a framework of strategic risk behavior.

  145. 145.

    Cf. Cadsby et al. (2007), p. 388.

  146. 146.

    Cf. Sitkin and Weingart (1995), p. 1589.

  147. 147.

    Cf. Williams et al. (2008), p. 59.

  148. 148.

    Cf. Libby and Luft (1993).

  149. 149.

    Cf. Schunk and Betsch (2006).

  150. 150.

    Refer to Eisenführ and Weber (1993), pp. 213ff. for an introduction to utility functions.

  151. 151.

    Hsee and Rottenstreich (2004), p. 28.

  152. 152.

    Cf. Campbell and Hackett (1986), p. 149 or Lundeberg et al. (1994), p. 2.

  153. 153.

    Cf. Gneezy et al. (2003).

  154. 154.

    Cf. Bernasek and Shwiff (2001), p. 355.

  155. 155.

    Cf. Estes and Hosseini (1988), p. 577.

  156. 156.

    Cf. Bliss and Potter (2002).

  157. 157.

    Cf. Croson and Gneezy (2009).

  158. 158.

    Cf. Niederle and Vesterlund (2007).

  159. 159.

    Cf. Dohmen and Falk (2011).

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Fehrenbacher, D.D. (2013). Formulation of Hypotheses. In: Design of Incentive Systems. Contributions to Management Science. Physica, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-33599-0_4

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