Tournament Incentives Affect Perceived Stress and Hormonal Stress Responses

Thomas Dohmen, Ingrid M.T. Rohde () and Tom Stolp ()
Additional contact information
Ingrid M.T. Rohde: Istanbul Bilgi University
Tom Stolp: ROA, Maastricht University

No 16025, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We conduct a laboratory experiment among male participants to investigate whether rewarding schemes that depend on work performance – in particular, tournament incentives – induce more stress than schemes that are independent of performance - fixed payment scheme. Stress is measured over the entire course of the experiment at both the hormonal and psychological level. Hormonal stress responses are captured by measuring salivary cortisol levels. Psychological stress responses are measured by self-reported feelings of stress and primary appraisals. We find that tournament incentives induce a stress response whereas a fixed payment does not induce stress. This stress response does not differ significantly across situations in which winners and losers of the tournament are publically announced and situations in which this information remains private. Biological and psychological stress measures are positively correlated, i.e. increased levels of cortisol are associated with stronger feelings of stress. Nevertheless, neither perceived psychological stress nor elevated cortisol levels in a previous tournament predict a subsequent choice between tournaments and fixed payment schemes, indicating that stress induced by incentives schemes is not a relevant criterion for sorting decisions in our experiment. Finally, we find that cortisol levels are severely elevated at the beginning of the experiment, suggesting that participants experience stress in anticipation of the experiment per se, potentially due to uncertainties associated with the unknown lab situation. We call this the novelty effect.

Keywords: incentives; stress; cortisol; sorting; laboratory experiment (search for similar items in EconPapers)
JEL-codes: D23 D87 D91 M52 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2023-03
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-hrm and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published - published in: Experimental Economics, 2023, 26 (4), 955–985.

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Related works:
Journal Article: Tournament incentives affect perceived stress and hormonal stress responses (2023)
Working Paper: Tournament Incentives Affect Perceived Stress and Hormonal Stress Responses (2023)
Working Paper: Tournament Incentives Affect Perceived Stress and Hormonal Stress Responses (2023)
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