Starting Point: Teaching and Learning Economics > Teaching Methods > Classroom Experiments > Classroom Experiments in Economics > Should I Provide Incentives?

Should I Provide Incentives?

Money
Don't be afraid to conduct a classroom experiment because of the expense of paying students to participate - classroom experiments don't usually involve money. Often the desire to "do well" and rivalry with other students to see who can earn the most hypothetical money is all that is required to make students try to do their best.

On the other hand, there are reasons to explore rewarding students for performance in economics classroom experiments. One is that students are typically given grade rewards (which are usually performance based) for completing any class assignment. Giving students points for participating or doing well in a classroom experiment signals that the classroom experiment is an important part of the course and needs to be taken seriously. The second is that research experiments in economics typically follow Vernon Smith's Induced Value Theory so that participants in experiments are rewarded for the decisions that they make. Including some sort of performance incentive more closely aligns the classroom experiment with research experiments.

Arguments Against Performance Based Rewards

Arguments For Performance Based Rewards

Strategies

References

Smith, Vernon L, 1976. "Experimental Economics: Induced Value Theory," American Economic Review, American Economic Association, vol. 66(2), pages 274-79, May.



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