Monetary and Social Incentives in Multi-Tasking: The Ranking Substitution Effect

47 Pages Posted: 19 May 2020

See all articles by Matthias Stefan

Matthias Stefan

University of Innsbruck

Juergen Huber

University of Innsbruck

Michael Kirchler

University of Innsbruck

Matthias Sutter

Max Planck Institute for Research on Collective Goods

Markus Walzl

University of Innsbruck

Multiple version iconThere are 2 versions of this paper

Date Written: May 2020

Abstract

Rankings are prevalent information and incentive tools in labor markets with strong competition for talent. In a dynamic model of multi-tasking and an accompanying experiment with financial professionals, we identify hidden ranking costs when performance in one task is incentivized and ranked while another prosocial task is not: (i) a ranking influences behavior if individuals lag behind: they spend more total effort and substitute effort in the prosocial task with effort in the ranked task; (ii) those ahead in the ranking spend less total effort and lower relative effort in the ranked task. Implications for incentive schemes are discussed.

Keywords: multi-tasking decision problem, rank incentives, framed field experiment, finance professionals

JEL Classification: C93, D02, D91

Suggested Citation

Stefan, Matthias and Huber, Juergen and Kirchler, Michael and Sutter, Matthias and Walzl, Markus, Monetary and Social Incentives in Multi-Tasking: The Ranking Substitution Effect (May 2020). MPI Collective Goods Discussion Paper, No. 2020/10, Available at SSRN: https://ssrn.com/abstract=3604902 or http://dx.doi.org/10.2139/ssrn.3604902

Matthias Stefan

University of Innsbruck ( email )

Universitätsstraße 15
Innsbruck, 6020
Austria

Juergen Huber

University of Innsbruck ( email )

Universitätsstraße 15
Innsbruck, Innsbruck 6020
Austria

Michael Kirchler

University of Innsbruck ( email )

Universitätsstraße 15
Innsbruck, Innsbruck 6020
Austria

Matthias Sutter (Contact Author)

Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

Markus Walzl

University of Innsbruck ( email )

Universitätsstraße 15
Innsbruck, Innsbruck 6020
Austria

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