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TESTING THE THEORY OF MULTITASKING: EVIDENCE FROM A NATURAL FIELD EXPERIMENT IN CHINESE FACTORIES
Author(s) -
Hong Fuhai,
Hossain Tanjim,
List John A.,
Tanaka Migiwa
Publication year - 2018
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/iere.12278
Subject(s) - salary , human multitasking , natural experiment , quality (philosophy) , incentive , economics , field (mathematics) , margin (machine learning) , factory (object oriented programming) , econometrics , piece work , operations management , labour economics , microeconomics , computer science , statistics , psychology , mathematics , cognitive psychology , philosophy , epistemology , machine learning , pure mathematics , programming language , market economy
Using a natural field experiment, we quantify the impact of one‐dimensional performance‐based incentives on incentivized (quantity) and nonincentivized (quality) dimensions of output for factory workers with a flat‐rate or a piece‐rate base salary. In particular, we observe output quality by hiring quality inspectors unbeknownst to the workers. We find that workers trade off quality for quantity, but the effect is statistically significant only for workers under a flat‐rate base salary. This variation in treatment effects is consistent with a simple theoretical model that predicts that when agents are already incented at the margin, the quantity–quality trade‐off resulting from performance pay is less prominent.