Abstract
AbstractWe examine a potential self‐selection bias in different samples of experimental subjects depending on the payment scheme offered in the recruiting process. We ran four field experiments in which undergraduate students in a microeconomics course were invited to voluntarily set their own goal for the final exam. They were informed that they would be given a monetary reward (else nothing) if their actual grade were higher than or equal to their goal. Rewards were an increasing (quadratic) function of the goal. We aimed at studying whether subjects’ willingness to participate in the experiment depends on their expected performance under different advertised reward criteria, like a rank‐order tournament and piece‐rate pay. Given that judgments about future performance are closely tied to previous performance, the midterm exam scores from the current academic course are compared between participants and nonparticipants in order to analyze sample‐sorting effects. We find that when a rank‐order tournament is offered alone or in combination with another reward mechanism, high‐performing students are more likely than low‐performing ones to participate in the experiment.
Highlights
Voluntary participation and incentives are two fundamental features of economic experiments
We examine a potential self-selection bias in different samples of subjects depending on the payment scheme offered in the recruiting process
This bias is not found when all subjects are rewarded depending on their performance, in spite of being informed in the recruiting process about the task to be performed and the payment scheme offered
Summary
Voluntary participation and incentives are two fundamental features of economic experiments. It could be that the self-selection process in economics experiments is driven by subjects’ cost/benefit analysis (Al-Ubaydli and List, 2015). Consistent with this hypothesis, Slonim et al (2013) found that students participating in lab experiments had less income and more recreation time than the general population. A practical recommendation for experimentalists is to be careful with participants’ expectations of rewards generated during their enlistment (Harrison et al, 2009)3 Following this suggestion, in order to reduce the self-selection bias Slonim et al (2013) recommended reducing the information on the nature of the task when recruiting. Sometimes it can be difficult to accomplish, especially when participants’ word-of-mouth occurs between repeated experimental sessions taking place on several days
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