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Separating real incentives and accountability

Published online by Cambridge University Press:  14 March 2025

Ferdinand M. Vieider
Ferdinand M. Vieider*
Affiliation:
Ludwig-Maximilans-University Munich, Geschwister-Scholl-Platz 1, 80539 Munich, Germany
*
e-mail: fvieider@gmail.com
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Abstract

Accountability—the expectation on the side of the decision maker that she may have to justify her decisions in front of somebody else—has been found by psychologists to strongly influence decision-making processes. The awareness of this issue remains however limited amongst economists, who tend to focus on the motivational effects of financial incentives. Accountability and incentives may provide different motivations for decision makers, and disentangling their effects is thus important for understanding real-world situations in which both are present. Separating accountability and incentives, I find different effects. Accountability is found to reduce preference reversals between frames, for which incentives have no effect. Incentives on the other hand are found to reduce risk seeking for losses, where accountability has no effect. In a choice task between simple and compound events, accountability increases the preference for the normatively superior simple event, while incentives have a weaker effect going in the opposite direction.

Keywords

Real v. hypothetical incentivesExperimental economicsAccountabilityInternal validitySimple and compound eventsExternal validityAnchoring and adjustmentFraming effects

JEL classification

C91: Laboratory, Individual Behavior D81: Criteria for Decision-Making under Risk and Uncertainty Z13: Economic Sociology • Economic Anthropology • Language • Social and Economic Stratification D71: Social Choice • Clubs • Committees • Associations

Information

Type
Original Paper
Information
Experimental Economics , Volume 14 , Issue 4 , November 2011 , pp. 507 - 518
Copyright
Copyright © 2011 Economic Science Association

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Footnotes

I am indebted to Peter P. Wakker, Philip E. Tetlock, and participants of the FUR in Barcelona for helpful comments. Any errors remain mine.

Electronic supplementary material The online version of this article (doi: 10.1007/s10683-011-9279-3) contains supplementary material, which is available to authorized users.

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