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Performance Incentives in Education: The Role of Goal Mismatch

Campos-Mercade, Pol LU ; Thiemann, Petra LU orcid and Wengström, Erik LU (2025) In Working Papers
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.
Please use this url to cite or link to this publication:
author
; and
organization
publishing date
type
Working paper/Preprint
publication status
published
subject
keywords
Incentives, Performance goals, Academic performance, Field experiment, C93, D90, I22, I23
in
Working Papers
issue
2025:5
pages
72 pages
language
English
LU publication?
yes
id
e72f2151-2824-4b12-9903-5643288e5bda
date added to LUP
2025-05-13 09:04:10
date last changed
2025-05-13 09:04:10
@misc{e72f2151-2824-4b12-9903-5643288e5bda,
  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.}},
  author       = {{Campos-Mercade, Pol and Thiemann, Petra and Wengström, Erik}},
  keywords     = {{Incentives; Performance goals; Academic performance; Field experiment; C93; D90; I22; I23}},
  language     = {{eng}},
  month        = {{05}},
  note         = {{Working Paper}},
  number       = {{2025:5}},
  series       = {{Working Papers}},
  title        = {{Performance Incentives in Education: The Role of Goal Mismatch}},
  url          = {{https://lup.lub.lu.se/search/files/219056067/WP25_5.pdf}},
  year         = {{2025}},
}