An effort based analysis of the paradoxical effects of incentives on decision-aided performance

This study examines the effect of incentives on decision-aided performance. In particular, the study provides further insight into whether, when, and how incentives affect task performance in the presence of decision aids by (1) replicating previous research showing the negative effects of incentives on performance; (2) investigating whether this effect generalizes to a more realistic scenario in which decision makers have access to additional contextual information not captured by the decision aid; and (3) applying an effort-based framework to explain the link between incentives and performance. In contrast to the findings of prior research, our study shows that incentives do not necessarily decrease performance in the presence of decision aids. Rather, we demonstrate that the effect of incentives on decision-aided performance depends on other contextual factors such as the absence or presence of additional contextual information. By further specifying the conditions under which incentives result in increases or decreases to decision-aided task performance, our results have implications for both future research and the design of incentive systems in practice.