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Free keywords:
multi-tasking decision problem, rank incentives, framed field experiment,
finance professionals
JEL:
C93 - Field Experiments
JEL:
D02 - Institutions: Design, Formation, Operations, and Impact
JEL:
D15 - Intertemporal Household Choice; Life Cycle Models and Saving
Abstract:
Rankings are prevalent information and incentive tools in labor markets with strong competition for talent. In a dynamic model of multi-tasking and an accompanying experiment with financial professionals, we identify hidden ranking costs when performance in one task is incentivized and ranked while another prosocial task is not: (i) a ranking influences behavior if individuals lag behind: they spend more total effort and substitute effort in the prosocial task with effort in the ranked task; (ii) those ahead in the ranking spend less total effort and lower relative effort in the ranked task. Implications for incentive schemes are discussed.
