Deposit? Yes, please! The effect of different modes of assigning reward-and deposit-based financial incentives on effort 307 9 estimate discount rates for highly impatient individuals.65 The non-parametric method used to estimate loss aversion, on the other hand, involves chained indifferences, meaning that it is not incentive-compatible and may be sensitive to error propagation.52, 66 Finally, in the design that was used for this study, it was impossible to disentangle the effect of having the opportunity to choose incentives from receiving informed advice. Disentangling these effects would require comparing nudged assignment with a condition in which respondents choose incentives without receiving advice. Conclusion To conclude, our study provides evidence that offering respondents free choice of incentives, including advice on which to take, may be beneficial in enhancing effort. That is, respondents that could self-select into incentives earned more and allocated more effort than those randomly allocated to an incentive scheme. We find that this may be driven by self-selection into deposit-based incentives by sophisticated individuals, which suggests that offering choice among different incentives scheme could only be beneficial for the subgroup that is sophisticated about requiring a deposit-scheme to maximize their long-run utility.
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