Abstract

Economists typically model financial incentives as enhancing performance, whereas psychologists emphasize that incentives can backfire. Experimental findings are mixed. We collect 2,193 estimates from 88 economics experiments and account for 48 contextual factors. Using recent advances in correcting for publication bias and p-hacking, we find that the corrected mean effect of financial incentives on performance is close to zero across most field contexts. Laboratory settings and loss framing yield statistically significant but modest positive effects even after bias correction. Our results suggest that increasing financial rewards rarely produces large performance gains in the experimental settings most studied by economists.

Bayesian model averaging
Fig: Heterogeneity in the effects of incentives

Reference: Petr Cala, Tomas Havranek, Zuzana Irsova, Martina Luskova, Jindrich Matousek, and Jiri Novak (2026), "Financial Incentives and Performance: A Meta-Analysis of Experiments in Economics." Journal of Political Economy Microeconomics. https://doi.org/10.1086/743543

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Headline result

Effect of financial incentives on performance: corrected for publication bias, about 0 (field contexts; lab and loss framing modestly positive), based on 2,193 estimates from 88 economics experiments (Cala et al. 2026, Journal of Political Economy Microeconomics).

How to cite

Petr Cala, Tomas Havranek, Zuzana Irsova, Martina Luskova, Jindrich Matousek, and Jiri Novak (2026), "Financial Incentives and Performance: A Meta-Analysis of Experiments in Economics." Journal of Political Economy Microeconomics. https://doi.org/10.1086/743543

BibTeX 
@article{cala2026incentives,
  author  = {Petr Cala and Tomas Havranek and Zuzana Irsova and Martina Luskova and Jindrich Matousek and Jiri Novak},
  title   = {Financial Incentives and Performance: A Meta-Analysis of Experiments in Economics},
  journal = {Journal of Political Economy Microeconomics},
  year    = {2026},
  doi     = {10.1086/743543},
}