Contract framing: Keep your eyes on the prize

Last registered on August 18, 2020
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Pre-Trial

Trial Information

General Information

Title
Contract framing: Keep your eyes on the prize
RCT ID
AEARCTR-0006299
Initial registration date
August 17, 2020

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
August 17, 2020, 1:18 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Last updated
August 18, 2020, 2:34 AM EDT

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Country
Switzerland
Region
Country
United States of America
Region

Primary Investigator

Name
Andrea Essl
Affiliation
University of Bern
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Other Primary Investigator(s)

PI Name
Stefanie Jaussi
PI Affiliation
University of Bern
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PI Name
Frauke von Bieberstein
PI Affiliation
University of Bern
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Additional Trial Information

Status
On going
Start date
2020-06-01
End date
2021-12-31
Keywords
Labor
Additional Keywords
Lab experiment, Contract framing, Penalty, Bonus, Loss aversion, Productivity
JEL code(s)
Secondary IDs
Abstract
This online experiment examines the influence of payment modalities on productivity when working under framed incentive contracts. We investigate the effect of payment visualization to make the payment situation more salient to the participants. We employ a 2x2 design with four different treatments varying the incentive contract (bonus vs. penalty) and the visualization (visualized dollar bills vs. description only). Participants work on 15 real effort tasks. At the end, one task is randomly selected for payment. If the selected task is solved correctly, participants in the bonus treatment receive an additional payment. In the penalty treatment, participants receive a higher payment upfront, but can lose part of it, if the selected task is solved incorrectly. Both contracts are payoff-equivalent. We vary whether the payment options are visualized on screen with dollar bills while participants work on the task, or are only explained using a verbal description.
External Link(s)

Registration Citation

Citation
Essl, Andrea, Stefanie Jaussi and Frauke von Bieberstein. 2020. "Contract framing: Keep your eyes on the prize." AEA RCT Registry. August 18. https://doi.org/10.1257/rct.6299-1.1
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
Online experiment on Amazon’s Mechanical Turk (MTurk). 2x2 between-subject design. Participants are randomized at the individual level. In the Bonus treatments the payment specifies a base pay of 1 USD plus a bonus of 1 USD if the individual solves the selected task correctly. In the Penalty treatments the payment specifies a base pay of 2 USD minus a penalty of 1 USD if the individual solves the selected task incorrectly. In the Visualization treatments images of USD bills are shown on screen. In the Description treatments a verbal explanation without visualization of the possible outcomes is used.
Intervention Start Date
2020-07-30
Intervention End Date
2020-09-30

Primary Outcomes

Primary Outcomes (end points)
Productivity (i.e. number of correct answers) in the real-effort task. We will analyze the data both, for all participants and for those participants, who solve at least one of the 15 tasks correctly.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Online experiment on Amazon’s Mechanical Turk (MTurk). 2x2 between-subject design. Participants are randomized at the individual level. In the Bonus treatments the payment specifies a base pay of 1 USD plus a bonus of 1 USD if the individual solves the selected task correctly. In the Penalty treatments the payment specifies a base pay of 2 USD minus a penalty of 1 USD if the individual solves the selected task incorrectly. In the Visualization treatments images of USD bills are shown on screen. In the Description treatments a verbal explanation without visualization of the possible outcomes is used.
Experimental Design Details
Randomization Method
Computer (online experiment)
Randomization Unit
individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
In total about 800 participants
Sample size: planned number of observations
In total about 800 participants
Sample size (or number of clusters) by treatment arms
About 200 participants per treatment
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials