On the validity of the Random Incentive System: an experimental test

Abstract

In this paper it is shown an experiment to test if the random incentive system (from now on RIS) works or not under extreme conditions. As it will be displayed, this mechanism is studied in two scenarios. The first case evolves the simplest experiment in which the subjects only have six decision problems and they know that only the last one will be really played to determine their payments, so the rest are hypothetical. The second one exposes the same six tasks, but under the random mechanism, so each decision has the same probability to be played and to determine the final payment to subjects. This study offers a positive conclusion of the RIS because there are no significant differences between these two treatments.