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Whose money is it anyway? Using prepaid incentives in experimental economics to create a natural environment

Published online by Cambridge University Press:  14 March 2025

Mosi Rosenboim
Affiliation:
Department of Management, Guilford Glazer Faculty of Business and Management, Ben-Gurion University of the Negev, Be'er Sheva, 84105, Israel Sapir Academic College, Department of Applied Economics, Sderot, 79165, Israel
Tal Shavit*
Affiliation:
School of Business Administration, College of Management Academic Studies, Rishon Lezion, 75190, Israel

Abstract

Simulating a real world environment is of utmost importance for achieving accurate and meaningful results in experimental economics. Offering monetary incentives is a common method of creating this environment. In general, experimenters provide the rewards at the time of experiment. In this paper, we argue that receiving the reward at the time of the experiment may lead participants to make decisions as if the money they are using were not their own. To solve this problem, we devised a “prepaid mechanism” that encourages participants to use the money as if it were their own.

Type
Original Paper
Copyright
Copyright © 2011 Economic Science Association

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Footnotes

Electronic supplementary material The online version of this article (doi:https://doi.org/10.1007/s10683-011-9294-4) contains supplementary material, which is available to authorized users.

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Supplementary material: File

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