Journal
EXPERIMENTAL ECONOMICS
Volume 15, Issue 1, Pages 145-157Publisher
SPRINGER
DOI: 10.1007/s10683-011-9294-4
Keywords
Second-price auction; Loss aversion; Trust game; Monetary incentive; Experiment; Financial decision making; Reward
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Simulating a real world environment is of utmost importance for achieving accurate and meaningful results in experimental economics. Offering monetary incentives is a common method of creating this environment. In general, experimenters provide the rewards at the time of experiment. In this paper, we argue that receiving the reward at the time of the experiment may lead participants to make decisions as if the money they are using were not their own. To solve this problem, we devised a prepaid mechanism that encourages participants to use the money as if it were their own.
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