Can Exit Prizes Induce Lame Ducks to Shirk Less? Experimental Evidence

Elected representatives serving their final period face only weak incentives toprovide costly effort. However, overlapping generations (OLG) models suggest thatexit prizes sustained by trigger strategies can induce representatives in their finalperiod to provide such effort. We evaluate this hypothesis using a simple OLGpublic good experiment, the central treatment being whether exit prizes arepermitted. We find that a significantly higher number of subjects in their final periodcontribute when exit prizes are permitted. However, this result does not originatefrom use of trigger strategies. More likely explanations include gift-exchange andfocal-point effects