REPETITION AND FINANCIAL INCENTIVES IN ECONOMICS EXPERIMENTS

While experimental methods have been an effective tool for economic research, there have been controversies on the methodological aspects. The reason why we need to care about it is clear: if the method in an experiment is not valid, the results from that experiment cannot be valid too. Among other things, the methodological issues of financial incentives and repetition, which are norms in experimental economics, have been at the centre of many debates. While there are previous reviews that investigate financial incentives and repetition separately, our view is that the effects of these two factors are interdependent rather than independent. Thus, our review here is more specific and more conditional, that is, we are interested in the answer to the question, ‘Do we need to use financial incentives conditional on the use of repetition?’ After we discuss the relationship between financial incentives and repetition, we argue, from a review of 44 experimental studies, that using financial incentives would be more necessary to improve the validity of experimental results if an experimenter needs to use repetition.