Don’T Fear the Meter: How Time Limits Bias Employment Contract Choices

Indranil Goswami, University at Buffalo, Canada
Oleg Urminsky, University of Chicago, USA
In six incentive-compatible studies, we find a biased and costly preference for flat-fee contracts (vs. time-metered contracts), particularly under longer time limits. This occurs because of biased time estimates, not risk preferences or inferences. The bias occurs whether workers’ product quality is fixed or variable, and persists for experienced managers.
[ to cite ]:
Indranil Goswami and Oleg Urminsky (2017) ,"Don’T Fear the Meter: How Time Limits Bias Employment Contract Choices", in NA - Advances in Consumer Research Volume 45, eds. Ayelet Gneezy, Vladas Griskevicius, and Patti Williams, Duluth, MN : Association for Consumer Research, Pages: 96-100.