The reinforcement paradox: Monetary incentives and Bayesian updating

C-Tier
Journal: Economics Letters
Year: 2022
Volume: 211
Issue: C

Score contribution per author:

0.251 = (α=2.01 / 4 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We report the results of two pre-registered experiments designed to study the reinforcement paradox: increased incentives often fail to increase and sometimes even decrease performance in Bayesian updating tasks. We argue that, in the presence of win/loss cues, higher incentives have two countervailing effects: increased error rates for reinforcement behavior (win-stay, lose-shift) and increased performance for decisions resulting from Bayesian updating. We find some evidence that incentives increase performance when the win/loss cue is removed whereas when reinforcement is active the effects of incentives are mixed.

Technical Details

RePEc Handle
repec:eee:ecolet:v:211:y:2022:i:c:s0165176521004511
Journal Field
General
Author Count
4
Added to Database
2026-01-24