Uri Gneezy: High Incentives

TITLE: High Incentives

SPEAKER: Uri Gneezy, UC San Diego

ABSTRACT: I discuss how high incentives affect decision-making and behavioral biases across a range of domains, including cognitive biases, risk preferences, lying, social preferences, and effort provision. Drawing on evidence from laboratory and field experiments conducted in countries such as Kenya and India, I show that larger incentives often increase attention and effort but do not necessarily improve logical reasoning or eliminate systematic biases such as the Allais paradox. Further, while social preferences and honesty respond somewhat to incentives, many behavioral tendencies remain surprisingly stable even under very high stakes. Overall, the presentation challenges the standard economic assumption that sufficiently large incentives always lead to fully rational and optimal behavior.

The seminar is co-organized with Cognitive Science seminar series.