Economic Incentives

This impact evaluation aims to measure the effect of a program that combines business training, mentoring, and a large cash transfer on high-potential small and medium businesses in Chile. 250 out of the top 500 firms participating in a business plan competition will be randomly selected to receive all three components of the program, while the remaining firms will receive none of them. In-person surveys with the entrepreneurs will be conducted before and 12 months after the program.

The design of research grants has been hypothesized to be a useful tool for influencing researchers and their science. We test this by conducting two thought experiments in a nationally representative survey of academic researchers. First, we offer participants a hypothetical grant with randomized attributes and ask how the grant would influence their research strategy. Longer grants increase researchers' willingness to take risks, but only among tenured professors, which suggests that job security and grant duration are complements.

Previous research in economics shows that compensation based on the pay-for-performance principle is effective in inducing higher levels of effort and productivity. On the other hand, research in psychology argues that performance-based financial incentives inhibit creativity and innovation. How should managerial compensation be structured if the goal is to induce managers to pursue more innovative business strategies?

Many school systems across the globe turned to online education during the COVID-19 pandemic. This context differs significantly from the prepandemic situation in which massive open online courses attracted large numbers of voluntary learners who struggled with completion. Students who are provided online courses by their high schools also have their behavior determined by actions of their teachers and school system.

In 2004 and 2005, the then Ministry of Economic Affairs issued innovation vouchers to SMEs to promote cooperation and knowledge exchange between companies and knowledge institutes in the field of innovation. The underlying idea was that more new products, services and/or processes can be developed with more knowledge exchange. This innovation can in turn lead to an increase in turnover and productivity, which ultimately leads to more prosperity.

Matching grants are one of the most common types of private sector development programs used in developing countries. But government subsidies to private firms can be controversial. A key question is that of additionality: do these programs get firms to undertake innovative activities that they would not otherwise do, or merely subsidize activities that would take place anyway? Randomized controlled trials can provide the counterfactual needed to answer this question, but efforts to experiment with matching grant programs have often failed.

Interference across competing firms in RCTs can be informative about market structure. An experiment that subsidizes a random subset of traders who buy cocoa from farmers in Sierra Leone illustrates this idea. Interpreting treatment-control differences in prices and quantities purchased from farmers through a model of Cournot competition reveals differentiation between traders is low. Combining this result with quasi-experimental variation in world prices shows that the number of traders competing is 50 percent higher than the number operating in a village.

We analyze, benchmark, and run randomized controlled trials on a panel of 7,463 U.S. entrepreneurs making incentivized sales forecasts. We assess accuracy using a novel administrative dataset obtained in collaboration with a leading US payment processing firm. At baseline, only 13% of entrepreneurs can forecast their firm’s sales in the next three months within 10% of the realized value, with 7.3% of the mean squared error attributable to bias and the remaining 92.7% attributable to noise.

This study analyses a field experiment conducted on AngelList Talent, a large online search platform for startup jobs.

Do capital grants improve microenterprise productivity? We use the lens of a production function to re-examine two previous randomised controlled trials that allocated capital to microenterprises. We find that productivity is higher for treated firms, and accounts for about 20-30 percent of the revenue effects of capital grants. Although long-run estimates are noisy, point estimates indicate that these productivity effects are sustained six years after the grants.