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Bonus versus penalty: how robust are the effects of contract framing?

De Quidt, Jonathan; Fallucchi, Francesco; Kölle, Felix; Nosenzo, Daniele; Quercia, Simone

Authors

Jonathan De Quidt

Francesco Fallucchi

Felix Kölle

Daniele Nosenzo

Simone Quercia



Abstract

We study the relative effectiveness of contracts that are framed either in terms of bonuses or penalties. In one set of treatments subjects know at the time of effort provision whether they have achieved the bonus / avoided the penalty. In another set of treatments subjects only learn the success of their performance at the end of the task. We fail to observe a contract framing effect in either condition: effort provision is statistically indistinguishable under bonus and penalty contracts.

Journal Article Type Article
Publication Date Dec 30, 2017
Journal Journal of the Economic Science Association
Electronic ISSN 2199-6776
Peer Reviewed Peer Reviewed
Volume 3
Issue 2
APA6 Citation De Quidt, J., Fallucchi, F., K├Âlle, F., Nosenzo, D., & Quercia, S. (2017). Bonus versus penalty: how robust are the effects of contract framing?. Journal- Economic Science Association, 3(2), https://doi.org/10.1007/s40881-017-0039-9
DOI https://doi.org/10.1007/s40881-017-0039-9
Keywords contract framing; bonus; penalty; fine; loss aversion
Publisher URL https://link.springer.com/article/10.1007/s40881-017-0039-9
Copyright Statement Copyright information regarding this work can be found at the following address: http://creativecommons.org/licenses/by/4.0

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Copyright Statement
Copyright information regarding this work can be found at the following address: http://creativecommons.org/licenses/by/4.0





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