Scandinavian Working Papers in Economics
Working Papers,
Lund University, Department of Economics
No 2025:5: Performance Incentives in Education: The Role of Goal Mismatch
Pol Campos-Mercade (), Petra Thiemann () and Erik Wengström ()
Additional contact information
Pol Campos-Mercade: Department of Economics, Lund University, Postal: School of Economics and Management, Box 7080, S-220 07 Lund, Sweden
Petra Thiemann: Department of Economics, Lund University, Postal: School of Economics and Management, Box 7080, S-220 07 Lund, Sweden
Erik Wengström: Department of Economics, Lund University, Postal: School of Economics and Management, Box 7080, S-220 07 Lund, Sweden
Abstract: We conduct a field experiment studying how financial incentives for achieving specific course grades affect university students, whether effects vary by ability, and whether allowing students to choose their goals improves outcomes. We find that incentives negatively affect performance, particularly among low-ability students assigned high goals. Survey data suggest this negative impact arises from a mismatch between assigned goals and students’ abilities, distorting their reference points and expectations. Allowing students to choose their goals partially mitigates this effect but does not eliminate it. Our results caution against incentives in education and highlight a novel mechanism through which incentives can backfire.
Keywords: Incentives; Performance goals; Academic performance; Field experiment
Language: English
72 pages, May 9, 2025
Full text files
WP25_5Full text
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