Master Economist on Strategic Quitting and Valuable Decisions on the Margin — John List

He contrasts a standard bonus (paid after performance) with a clawback (paid upfront, then taken back if goals aren’t met) and says it works broadly because people are motivated to avoid losing what they already “own.” He describes using it with workers, teachers, and his own children, and reports improved effort and outcomes.

He says input-based incentives are fairer when people can control the inputs (e.g., time studying, books read) but not the output (e.g., exam grade on a curve). In workplaces, he notes inputs are often hard to observe, so organizations tend to incentivize outputs.

He acknowledges two key risks: incentives may depreciate with repetition, and they may create negative side effects (stress, resentment, quitting). He reports clawbacks depreciate “a little bit” but not much, and some workers even like them as a commitment device—some will pay to use them—though others hate them.

He describes his charitable-giving research beginning as a field experiment to raise money for a university center, after learning fundraisers’ “rules of thumb” often lacked data. He reports findings like the match mechanism matters more than the match ratio, and claims drivers of giving differ by gender (tax advantages for men; altruism/social pressure for women).

Using Uber data after tipping was introduced, he reports tipping behavior differs from charitable giving: men tip more than women on Uber, only about 15% of trips are tipped, about 60% never tip, and only about 1% tip every trip. He also reports men tip younger female drivers more, and that face-to-face contexts increase tipping versus anonymous or delayed prompts.