Mini Case Study

Reward vs. Punish

Determining which of two economically equivalent contract designs is more motivating

By Fei Du

Published

Coin with winner embossed

About this mini case study

Imagine choosing between two economically equivalent contract designs: (1) You receive $80 base pay and a $20 bonus if you meet your target. (2) You receive $100 base pay and a $20 penalty if you do not meet your target. Which do you prefer? Which one is more motivating?

Author

How to cite

"Reward vs. Punish" by Fei Du. University of Illinois-Deloitte Foundation Center for Business Emerging Technologies. https://emergingtech.giesbusiness.illinois.edu/distributed-content/reward-vs-punish/. Licensed under CC BY-NC-SA 4.0.

Materials are shared under the Creative Commons Attribution-NonCommercial-ShareAlike 4.0 license.

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University of Illinois-Deloitte Foundation Center for Business Emerging Technologies
Champaign, IL 61820
Email: EmergingTech@business.illinois.edu
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