Experimental Design Details
To investigate the effects of incentives on performance in cognitive biases, the present study measures whether teams and/or incentives may improve decision-making. We conduct a laboratory experiment with approximately 500 participants to test whether the use of teams and incentives decreases the effect of well-known cognitive biases that measure statistical and cognitive reasoning, including: the anchoring effect, the availability heuristic, base rate neglect, the cognitive reflection test, the conjunction fallacy, contingent thinking, the gambler's fallacy, and the Monty Hall problem.
For each cognitive bias category (out of 8), participants are given three items of varying difficulty for a total of 24 decisions. All decisions are randomized before the experiment with the constraint that no similar item may appear next to one another, in order to avoid learning effects. The same randomization is then implemented for all experimental conditions. In the TEAM-INCENTIVE treatment, teams earn $1.00 for each answer they score correctly, whereas the TEAM-CONTROL treatment does not earn any payment for correct answers. Similarly, in the INDIVIDUAL-INCENTIVE treatment, individuals earn $1.00 for each answer they score correctly, yet no payment is given in the INDIVIDUAL-CONTROL condition. After completing the main decision-making questions, participants play economic games to measure cooperation and competition. They then complete a memory task (incentivized at .50 per item out of 12), Raven's 2 matrix (incentivized at .50 per item out of 24), a risk, ambiguity, and time preference measure task (incentivized), and scales and demographic items (including BFI-44 personality inventory, the FInancial Management Behavior Scale, the Abbreviated Numeracy Scale, Lay Rationalism, and an index for COVID19 compliance risk behaviors).