The effect of incentive structure on search in the secretary problem
We tested the effectiveness of performance-based incentive structures using three incentive structures --- commission base, best only and flat fee --- and two levels of context --- no context and house-selling --- in an experiment in which participants made decisions in a variant of the secretary pr...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Society for Judgment and Decision Making
2020-01-01
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| Series: | Judgment and Decision Making |
| Subjects: | |
| Online Access: | http://journal.sjdm.org/19/190423/jdm190423.pdf |
| Summary: | We tested the
effectiveness of performance-based incentive structures using three incentive
structures --- commission base, best only and flat fee --- and two levels of
context --- no context and house-selling --- in an experiment in which
participants made decisions in a variant of the secretary problem. Key measures
of performance were the amount of search and the rounds in which the very best
(optimal) offer was chosen. We found that having a commission-based
proportional incentive did not produce better performance than having a flat
payment for any of the performance measures considered. However, another
performance-based incentive --- the best only --- increased the length of their
searches and led to more optimal offers. These results applied both when there
was no context and when the context was selling a house. |
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| ISSN: | 1930-2975 |