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Contribution Details
| Type | Journal Article |
| Scope | Discipline-based scholarship |
| Title | Who opts in? Composition effects and disappointment from participation payments |
| Organization Unit | |
| Authors |
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| Item Subtype | Original Work |
| Refereed | Yes |
| Status | Published electronically before print/final form (Epub ahead of print) |
| Language |
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| Journal Title | The Review of Economics and Statistics |
| Publisher | MIT Press |
| Geographical Reach | international |
| ISSN | 0034-6535 |
| Page Range | Epub ahead of print |
| Date | 2022 |
| Abstract Text | Participation payments are used in many transactions about which people know little, but can learn more: incentives for medical trial participation, signing bonuses for job applicants, or price rebates on consumer durables. Who opts into the transaction when given such incentives? We theoretically and experimentally identify a composition effect whereby incentives disproportionately increase participation among those for whom learning is harder. Moreover, these individuals use less information to decide whether to participate, which makes disappointment more likely. The learning-based composition effect is stronger in settings in which information acquisition is more difficult. |
| Free access at | DOI |
| Digital Object Identifier | 10.1162/rest_a_01268 |
| Other Identification Number | merlin-id:23317 |
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| Keywords | Economics and econometrics, social sciences (miscellaneous), rational inattention, incentives, composition effect, selection, screening, evaluability |