SPS - On (un)intended effects of incentives

Course description

Incentives matter. And naturally, people assume that higher incentives should lead to intended changes in behavior (for example to higher effort provision or performance). In turn, principals in many different environments use incentives to encourage specific behaviors of agents.

In this seminar we will discuss recent empirical / experimental contributions that study the causal effects of incentives in different environments. We will look at whether and when incentives do (or do not) result in better performance, whether incentives shape team formation, whether incentives can be used in non-production environments, and under which conditions incentives can fire back. Doing so will enable students to have a better understanding of why and when incentives can work but also enable them to learn about state-of-the art methods of causal identification in economic (lab and field) experiments. Thereby, the seminar also contributes to students' ability to judge evidence from scientific studies more generally, and critically reflect on broad causal claims made in scientific studies using observational data.