The DSC is partnering with the Marketing Department at the Fisher College of Business to host Dr. Gal Zauberman on May 2-3. Dr. Zauberman studies human judgment and decision making, the nature of experiences, financial decision making, time perception, and memory for emotions and choice. He has published articles in leading marketing and psychology journals on topics that include factors that affect individuals’ evaluations, preferences, and choice, with specific interest in the role of time in decisions and experiences.
Talk 2 (May 3, 9:30-11am, Fisher 500)
Taxes and Motivation: Lessons from the Lab
Taxes are ubiquitous and generally disliked. Previous research not only demonstrates people’s negative attitudes towards tax, but also suggests that people avoid taxes beyond the financial penalty associated with them (i.e., the monetary cost of the tax). The present research proposes and shows that, although people predict that income taxes will be demotivating, the actual relationship between income taxes, productivity, and satisfaction is not straightforward. Across four incentive-compatible studies (total N=2,506), we show that people’s predictions of how different income tax schedules will influence productivity and satisfaction do not consistently match how people actually respond in an experimental pay-per-performance setting. Further, we demonstrate that people’s productivity is more sensitive to changes in wages than changes in taxes per se, but that participants’ satisfaction is significantly affected by both wages and taxes. If time allows, I will also present studies examining the real-time effects of taxation and redistribution on workers’ effort (amount of labor supplied) and sentiment (satisfaction and perceived fairness regarding compensation).
