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The Results: Drumroll, Please…

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After a few weeks, Ramesh and the other four graduate students finished the data collection in a number of villages and mailed me the performance records. I was very eager to take a first look at the results. Was our Indian experiment worth the time and effort? Would the different levels of bonuses tally with the levels of performance? Would those who could receive the highest bonuses perform better? Worse?

For me, taking a first peek into a data set is one of the most exciting experiences in research. Though it’s not quite as thrilling as, say, catching a first glimpse of one’s child on an ultrasound, it’s easily more wonderful than opening a birthday present. In fact, for me there’s a ceremonial aspect to viewing a first set of statistical analysis. Early on in my research career, after having spent weeks or months of collecting data, I would enter all the numbers into a data set and format it for statistical analysis. Weeks and months of work would bring me to the point of discovery, and I wanted to be sure to celebrate the moment. I would take a break and pour myself a glass of wine or make a cup of tea. Only then would I sit down to celebrate the magical moment when the solution to the experimental puzzle I had been working on was finally revealed.

That magical moment is infrequent for me these days. Now that I’m no longer a student, my calendar is filled with commitments and I no longer have time to analyze experimental data myself. So, under normal circumstances, my students or collaborators take the first pass at the data analysis and experience the rewarding moment themselves. But when the data from India arrived, I was itching to have this experience once again. So I persuaded Nina to give me the data set and made her promise that she would not look at the data while I worked on it. Nina promised, and I reinstated my data analysis ritual, wine and all.

BEFORE I TELL you the results, how well do you think the participants in the three groups did? Would you guess that those who could earn a medium-level bonus did better than those who were faced with the small one? Do you think those hoping for a very large bonus did better than those who could achieve a medium-level one? We found that those who could earn a small bonus (equivalent to one day of pay) and the medium-level bonus (equivalent to two weeks’ worth of work) did not differ much from each other. We concluded that since even our small payment was worth a substantial amount to our participants, it probably already maximized their motivation. But how did they perform when the very large bonus (the amount equivalent to five months of their regular pay rate) was on the line? As you can tell from the figure above, the data from our experiment showed that people, at least in this regard, are very much like rats. Those who stood to earn the most demonstrated the lowest level of performance. Relative to those in the low-or medium-bonus conditions, they achieved good or very good performance less than a third of the time. The experience was so stressful to those in the very-large-bonus condition that they choked under the pressure, much like the rats in the Yerkes and Dodson experiment.

The graph below summarizes the results for the three bonus conditions across the six games. The “very good” line represents the percentage of people in each condition who achieved this level of performance. The “earnings” line represents the percentage of total payoff that people in each condition earned.


The Upside of Irrationality: The Unexpected Benefits of Defying Logic at Work and at Home

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