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Abstract:

Development Discussion Paper
Awards Unbundled: Evidence from a Natural Field Experiment
Nava Ashraf, Oriana Bandiera and Scott Lee
July 2013
Paper No' EOPP 046:
Full Paper (pdf)

JEL Classification: D84; D83; J33; M52; O15


Tags: awards; social comparison; optimal expectations; incentives

Organizations often use awards to incentivize performance. We design a field experiment to unbundle the mechanisms through which awards may affect behavior: by facilitating social comparison and by conferring recognition and visibility. In a nationwide health worker training program in Zambia, employer recognition and social visibility increase performance while social comparison reduces it, especially for low-ability trainees. These effects appear when treatments are announced and persist through training. The findings are consistent with a model of optimal expectations in which low-ability individuals exert low effort in order to avoid information about their relative ability.