This paper studies motivational crowding-out effects after financial incentives are lowered. In a real-effort setting, workers receive a piece rate before financial incentives are substituted by a one-time payment. Under the fixed payment, effort is significantly lower only when preceded by...

This paper shows that prior financial incentives induce a crowding out effect when incentives are discontinued. In our real-effort experiment workers receive a piece rate before monetary incentives are substituted by a one-time payment. In this case, workers' performance significantly drops when...

This paper studies motivational crowding-out effects after financial incentives are lowered. In a real-effort setting, workers receive a piece rate before financial incentives are substituted by a one-time payment. Under the fixed payment, effort is significantly lower only when preceded by...