Large Stakes and Big Mistakes

I’m on vacation, and catching up with some reading. Dan Ariely’s book on the Upside of Irrationality is so far decent, though a little too chatty at times (I like a little less of the human interest backstory, YMMV). 

In any case, one thing I plan to do over the next couple days is find and read some of the studies I hit in it that I find interesting. This one is pretty neat — an experiment with motivation through money and social stress that appears to confirm the existence of  Yerkes-Dodson Law in humans — as potential monetary/social reward increases, performance increases then decreases. In the case displayed above, the small rewards appear to have been set too high, so you don’t get the full curve here, but the deterioration at higher levels of payment is pronounced. 

And yes, I know you’ve probably seen Dan Pink cover a portion of this study — but do you want to spend your life watching TED videos, or do you want to read some research? Right. I thought so. 

[Note: the tables are not presented in-text, but scroll to the end of the paper and you’ll find them there.]