Age differences in the reaction to incentives – A test of the successful ageing extension of Social Production Functions Theory

Abstract

Abstract The “aging employee” has recently become a hot topic in many fields of behavioral research. With the aim to determine the effects of different incentive schemes (piece rate, competition, choice between piece rate and competition, social or increased monetary incentives) on performance of young and older subjects, we look at behavior of a group of younger and older adults on a well-established real effort task. Based on the theory of Social Production Functions, we hypothesize age effects that depend on the incentive schemes used. We show that older adults are less productive than younger adults in all conditions, but that different incentive schemes exert similar influences on productivity in both age groups. While we do not find a significant age difference in competitiveness and reject the age-related predictions of the Social Production Functions Theory, we replicate the gender difference in competitiveness found in the literature. Social incentives in men have an at least as strong or even stronger effect on performance than increased monetary incentives. Women do not show an increase in performance with social incentives.