Enke, Benjamin
[Author]
;
Gneezy, Uri
[Other];
Hall, Brian J.
[Other];
Martin, David
[Other];
Nelidov, Vadim
[Other];
Offerman, Theo
[Other];
van de Ven, Jeroen
[Other]
Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments 2020 erstellt
Description:
Despite decades of research on heuristics and biases, empirical evidence on the effect of large incentives – as present in relevant economic decisions – on cognitive biases is scant. This paper tests the effect of incentives on four widely documented biases: base rate neglect, anchoring, failure of contingent thinking, and intuitive reasoning in the Cognitive Reflection Test. In pre-registered laboratory experiments with 1,236 college students in Nairobi, we implement three incentive levels: no incentives, standard lab payments, and very high incentives that increase the stakes by a factor of 100 to more than a monthly income. We find that cognitive effort as measured by response times increases by 40% with very high stakes. Performance, on the other hand, improves very mildly or not at all as incentives increase, with the largest improvements due to a reduced reliance on intuitions. In none of the tasks are very high stakes sufficient to de-bias participants, or come even close to doing so. These results contrast with expert predictions that forecast larger performance improvements