Effort Choices Research Articles

Dynamic Asset Allocation and Retirement Decision with Consumption Ratcheting and Effort Choice

This study examines the problem of choosing optimal consumption, investment, early retirement, and effort levels for an economic agent who is unwilling to reduce their consumption over time. The agent’s income depends on a fixed wage rate, and varies proportionally with their level of effort, which incurs disutility due to labor. By applying the dual-martingale method, we reformulate the problem into its dual form, dividing it into two distinct sub-problems: one focuses on selecting a consumption path that does not decrease, while the other determines the optimal timing for early retirement. Using this method, we find optimal strategies in the form of explicit closed-form solutions.

A common stay-on-goal mechanism in anterior cingulate cortex for information and effort choices.

Humans and non-humans alike often make choices to gain information, even when the information cannot be used to change the outcome. Prior research has shown the anterior cingulate cortex (ACC) is important for evaluating options involving reward-predictive information. Here we studied the role of ACC in information choices using optical inhibition to evaluate the contribution of this region during specific epochs of decision making. Rats could choose between an uninformative option followed by a cue that predicted reward 50% of the time vs. a fully informative option that signaled outcomes with certainty, but was rewarded only 20% of the time. Reward seeking during the informative S+ cue decreased following ACC inhibition, indicating a causal contribution of this region in supporting reward expectation to a cue signaling reward with certainty. Separately in a positive control experiment and in support of a known role for this region in sustaining high-effort behavior for preferred rewards, we observed reduced lever presses and lower breakpoints in effort choices following ACC inhibition. The lack of changes in reward latencies in both types of decisions indicate the motivational value of rewards remained intact, revealing instead a common role for ACC in maintaining persistence toward certain and valuable rewards.

The impact of social status on the formation of collaborative ties and effort provision: An experimental study

We study whether competition for social status induces higher effort provision and efficiency when individuals collaborate with their network neighbors. We consider a laboratory experiment in which individuals choose a costly collaborative effort and their network neighbors. They benefit from their neighbors’ effort and effort choices of direct neighbors are strategic complements. We introduce two types of social status in a 2 × 2 factorial design: (1) individuals receive monetary benefits for incoming links representing popularity; (2) they receive feedback on their relative payoff ranking within the group. We find that link benefits induce higher effort provision and strengthen the collaborative ties relative to the Baseline treatment without social status. In contrast, the ranking information induces lower effort as individuals start competing for higher ranking. Overall, we find that social status has no significant impact on the number of links in the network and the efficiency of collaboration in the group.

Lying to Speak the Truth: Selective Manipulation and Improved Information Transmission

ABSTRACTWe analyze a principal‐agent model in which an effort‐averse agent can manipulate a publicly observable performance report. The principal cannot observe the agent's cost of effort, her effort choice, and whether she manipulated the report. An optimal contract links compensation to the realized output and the (possibly manipulated) report. Manipulation can be beneficial to the principal because it can make the report more informative about the agent's effort choice, thereby reducing the agent's information rent. This is achieved through a contract that incentivizes the agent to selectively engage in manipulation based on her effort choice.

Social ties at work and effort choice: Experimental evidence from Tanzania

Many firms hire workers via social networks. Whether workers who are socially connected to their employers exert more effort on the job is an unsettled debate. We address this question through a novel experiment with small-business owners in Tanzania. Participants are paired with a worker who conducts a real-effort task, and receive a payoff that depends on the worker’s effort. Some business owners are randomly paired with workers they know, while others are paired with strangers. We find that being connected to one’s employer does not affect workers’ effort on average, but increases the effort of workers without children. Our results are consistent with workers having an altruistic drive in exerting effort when they work for someone they know, which fades away when their valuation of private income becomes stronger.

Network formation and efficiency in linear-quadratic games: An experimental study

Abstract We experimentally study effort provision and network formation in the linear-quadratic game characterised by positive externality and complementarity of effort choices among network neighbours. We compare experimental outcomes to the equilibrium and efficient allocations and study the impact of group size and linking costs. We find that individuals overprovide effort relative to the equilibrium level on the network they form. However, their payoffs are lower than the equilibrium payoffs because they create fewer links than is optimal, which limits the beneficial spillover effects of effort provision. Reducing the linking costs does not significantly increase the connectedness of the network and the welfare loss is higher in larger groups. Individuals connect to the highest-effort providers in the group and ignore links to relative low-effort providers, even if those links would be beneficial to form. This effect explains the lack of links in the network.

Localizing Directed Self-Placement: UX Stories and Methods

This article seeks to address the need for research supporting localization efforts in placement assessment. We argue that as a highly technical communication endeavor, directed self-placement (DSP) and its developers can benefit from research in technical and professional communication (TPC). We synthesize the theoretical relations between DSP and TPC, especially regarding models of localization, and demonstrate how implementing user experience (UX) design can help address placement equity concerns by foregrounding accessibility and usability from the beginning. We follow this discussion of DSP and TPC scholarship with storied examples from our institution, providing a sample range of UX methods that (1) are flexible across contexts, (2) are relatively manageable to implement, and (3) are cognizant of WPA, staff, and students’ time, labor, and compensation concerns. We propose DSP as a form of advocacy, and we demonstrate how UX method/ologies are an excellent choice for DSP localization efforts toward equity and accessibility.

Efficiency wages with motivated agents

Many jobs serve a social purpose beyond profit maximization, contributing positively to society. This paper uses a modified principal-agent gift-exchange game with positive externality (prosocial treatment) to study how workers' prosocial motivation interacts with the use of efficiency wages in stimulating effort. We find that prosocial motivation and efficiency wages are independent in stimulating effort: compared to a standard gift-exchange game (GE treatment), the presence of the externality shifts the agents' effort choice function upwards without affecting its slope. Thus, if principals were profit-maximizers, wage offers should be the same in both treatments. However, principals offer higher wages in the prosocial treatment. We show that this is due to principals in the GE treatment highly underestimating agents' reciprocity and thereby offering wages below the profit-maximizing level. Results from robustness-checks further suggest that our findings are unlikely to be driven by a simple efficiency effect.

Does pay inequality affect worker effort? An assessment of experimental designs and evidence

This paper develops a theoretical framework to think about employees' effort choices, and applies this framework to assess the ability of existing experimental designs to identify the effect of pay inequality on worker effort. The analysis shows that failure to control for a number of confounds—such as reciprocity towards the employer in multi-lateral gift-exchange games (vertical fairness), or the incentive to increase effort when feeling underpaid under piece rates (income targeting)—may lead to inaccurate interpretation of evidence of treatment effects. In light of these findings, the paper provides a set of recommendations on how to improve identification in the design of controlled experiments in the future.

Unobservable costly effort in security design

I introduce unobservable costly effort into the canonical signalling model of security design. The choice of effort determines the quality of the security and creates an additional optimisation problem the firm must solve. My main result is that both optimal effort and optimal profits are decreasing in the firm’s preference for liquidity. I also show that optimal effort is greater under symmetric information. My approach provides a theoretical explanation for empirical results that cannot be obtained within the standard signalling framework. In addition, I extend existing methods to solve signalling models with endogenous private information.

Risk-sharing and entrepreneurship

This study examines the impact of risk-sharing on entrepreneurship-driven innovation in an occupational choice model, where entrepreneurs exert effort to innovate. Risk-sharing may increase the number of individuals who become entrepreneurs by limiting the downside risk. The effort of entrepreneurs may, however, be hampered by high risk-sharing if this limits the returns faced by successful entrepreneurs relative to unsuccessful entrepreneurs. We construct a simple theoretical model where risk-sharing may be either private or provided through the welfare state by means of taxation. We show that, in addition to the occupational and effort choice dimensions, the level of public risk-sharing also matters for the characteristics of entrepreneurs.

Impairment of value-based decision-making in morphine-dependent rats is partly related to neural connectivity between the anterior cingulate cortex and basolateral amygdala.

Previous studies have established that the amygdala specifically the basolateral amygdala (BLA), has a fundamental role in decision-making. The present study aimed to investigate functional and neural synchronization between the BLA and anterior cingulate cortex (ACC) while making effort-choice decisions regarding pre-morphine dependence and morphine dependence times. A T-maze decision-making task with a differential outlay (great vs. small effort) and benefit (great vs. small reward) was done, and local field potentials from the BLA and ACC were assessed simultaneously. Results illustrated that in pre-morphine dependence time, when the animals made great reward/great effort decisions, there was a neural synchronization between both regions in beta and gamma frequency bands; and also, in delta, theta, beta, and gamma frequencies while expending effort and climbing the barrier. However, in morphine-dependent rats, during low reward/low effort choice and also during expending low effort, there was just a weak neural coherence in gamma frequency. Besides, there was neural synchronization in theta, beta, and gamma frequencies during reaching great reward in pre-morphine dependence time. Nevertheless, during reaching low reward in morphine dependence time, there was a weaker coherence in beta and gamma compared to pre-morphine dependence. These findings showed that functional and neural coherence between the BLA and ACC has a fundamental role in making the effort-based decision and expending effort. Preference for low reward/low effort, and decrease in expending effort in morphine-dependent rats is partly associated with the changes in the neural coherence between the BLA and ACC.

Equilibrium Grading Policies With Implications for Female Interest in STEM Courses

We show that stricter grading policies in STEM courses reduce STEM enrollment, especially for women. We estimate a model of student demand for courses and optimal effort choices given professor grading policies. Grading policies are treated as equilibrium objects that in part depend on student demand for courses. Differences in demand for STEM and non‐STEM courses explain much of why STEM classes give lower grades. Restrictions on grading policies that equalize average grades across classes reduce the STEM gender gap and increase overall enrollment in STEM classes.

Relational enforcement

A principal incentivizes an agent to maintain compliance and to truthfully announce any breaches of compliance. Compliance is imperfectly controlled by the agent's private effort choices, is partially persistent, and is verifiable by the principal only through costly inspections. We show that in principal‐optimal equilibria, the principal enforces maximum compliance using deterministic inspections. Periodic inspection cycles are suspended during periods of self‐reported noncompliance, during which the agent is fined. We show how commitment to random inspections would benefit the principal, and discuss possible ways for the principal to overcome her commitment problem.

Policy abstraction as a predictor of cognitive effort avoidance.

Consistent evidence has established that people avoid cognitively effortful tasks. However, the features that make a task cognitively effortful are still not well understood. Multiple hypotheses have been proposed regarding which task demands underlie cognitive effort costs, such as time-on-task, error likelihood, and the general engagement of cognitive control. In this study, we test the novel hypothesis that tasks requiring behavior according to higher degrees of policy abstraction are experienced as more effortful. Accordingly, policy abstraction, operationalized as the levels of contextual contingency required by task rules, drives task avoidance over and above the effects of task performance, such as time-on-task or error likelihood. To test this hypothesis, we combined two previously established cognitive control tasks that parametrically manipulated policy abstraction with the demand selection task procedure. The design of these tasks allowed us to test whether people avoided tasks with higher order policy abstraction while controlling for the contribution of factors such as time-on-task and expected error rate (ER). Consistent with our hypothesis, we observed that policy abstraction was the strongest predictor of cognitive effort choices, followed by ER. This was evident across both studies and in a within-subject cross-study analysis. These results establish at least one task feature independent of performance, which is predictive of task avoidance behavior. We interpret these results within an opportunity cost framework for understanding aversive experiences of cognitive effort while performing a task. (PsycInfo Database Record (c) 2023 APA, all rights reserved).

Study of Conducted Emission Characteristics Induction Stoves on 9 kHz-30 MHz Frequency

The presence of increasingly sophisticated and innovative cooking utensils such as induction cookers has changed the way of cooking by providing a high level of efficiency. Induction cookers are also a breakthrough in reducing carbon emissions and making them an important choice in energy conservation efforts. The use of induction stoves in the community still faces several obstacles such as relatively high prices, significant power consumption, and the need for special cooking containers. In addition, the development of induction stove technology can produce electromagnetic emissions in the form of conduction emissions. Conducted emission is electromagnetic interference caused by electronic devices through conductors which can be interpreted as noise currents that propagate on the conduction path and have the potential to interfere with other electronic equipment through voltage sources. In the same power grid, conducted emissions caused by induction stoves can also interfere with data signals using Power Line Carrier (PLC) at a frequency of 30-500 kHz. This study aims to understand and identify patterns of electromagnetic wave emission, namely conduction emissions produced by induction stoves. The main focus is on conducted emissions, which can affect the performance of such electronic devices. The results of research related to the characteristics of the conducted emission value of this induction stove are expected so that this household device is safer and more comfortable to use by the community and can provide a reference for the further development of induction stove technology. The test method was carried out on 4 (four) brands of induction stoves C, A, M and P under various operating conditions and cooking modes both individually and simultaneously in the frequency range of 9 KHz-30 MHz through Electromagnetic Compatibility (EMC) testing. The measured parameter is a Quasi Peak (QP) value, in accordance with CISPR standard 14.1:2020. Based on measurements in the frequency range of 9 kHz-30 MHz, individual conditions were obtained that some of the induction stoves used in this study were above the threshold values required in CISPR 14.1:2020. Based on measurements with the condition that the induction stove is operated simultaneously, the level of conducted emission decreases and there is a disturbance at a new frequency beyond the disturbance frequency at individual conditions.

The ratchet effect: A learning perspective

We examine the ratchet effect under moral hazard and symmetric learning by worker and firm about new technology. Shirking increases the worker's future payoffs, since the firm overestimates job difficulty. High-powered incentives to deter shirking induce the agent to over-work, since he can quit if the firm thinks the job is too easy. With continuous effort choices, no deterministic interior effort is implementable. We provide conditions under which randomized effort is implementable, so that a profit-maximizing distribution over efforts exists.

Optimal allocations in growth models with private information

This paper considers a class of growth models with idiosyncratic human capital risk and private information about individual effort choices (moral hazard). Households are infinitely-lived and have preferences that allow for a time-additive expected utility representation with a one-period utility function that is additive over consumption and effort as well as logarithmic over consumption. Human capital investment is risky due to idiosyncratic shocks that follow a Markov process with transition probabilities that depend on effort choices. The production process is represented by an aggregate production function that uses physical capital and human capital as input factors. We show that constrained optimal allocations are simple in the sense that individual effort levels and individual consumption growth rates are history-independent. Further, constrained optimal allocations are the solutions to a recursive social planner problem that is simple in the sense that exogenous shocks are the only state variables. We also show that constrained optimal allocations can be decentralized as competitive equilibrium allocations of a market economy with a simple tax- and transfer scheme. Finally, it is always optimal to subsidize human capital investment in the market economy.

Accounting Accruals, Audit Quality, and Audit Pricing

This study examines the impact of the interaction between firms' accounting choices and auditors' audit effort choices on audit pricing. In a multi-period model, I focus on a central feature of accounting: reversing accruals. I find that initial low-balling, defined as lower audit fees than audit costs, arises independently from the direction of accruals, but increases with more conservatism in the first engagement period. The reason is that a conservative accruals strategy implies understated earnings today and overstated earnings in the future, which creates a higher investor demand for auditing services in future periods. The incumbent auditor can satisfy this future demand better than any competitor, because the first-period learning cost is sunk. Thus, conservatism enhances the competitive advantage of the incumbent and increases the future quasi-rent, which is used for a higher initial low-balling discount. I further show implications of the auditor-firm interaction for fee-cutting, a common proxy for low-balling, and the frequency of modified audit opinions, a common proxy for audit quality. Thus, my model provides a theoretical foundation for the connection between high low-balling discounts, accounting accruals, and audit quality.

Investigating the robustness and relevance of an evidence‐based sense‐making construct to bridge the research‐practice gap in cross‐sector partnerships

AbstractCross‐sector partnerships (CSPs) are important for tackling development challenges across public, private, and non‐profit sectors. Despite their growing prevalence as partnership models of choice for grand challenge efforts, there is little evidence‐based understanding about the dominant features of these engagements. This makes it difficult to develop CSP engagement models that are useful across development problems and settings. We posit that CSPs are intrinsically cross‐disciplinary endeavors and require collaboration models that enable interdisciplinary problem orientation and solution casting. To facilitate sense‐making in partnership efforts, a CSP engagement model must therefore integrate perspectives on partnership from major disciplines and practitioner experiences. Using automated content analysis of peer‐reviewed publications and manual content analysis of practitioner interviews, we explored the robustness and relevance of partnership capacity theory (PCT), an interdisciplinary CSP engagement model, as an evidence‐based approach to CSP with best‐practice grounding. We found PCT comprehensively characterizes collaborative CSP dynamics and offers a foundational view of CSP best practices.