Scott A. Jeffrey

Factors influencing impulse buying during an online purchase

Abstract Using actual purchasing behavior by visitors to a High School Reunion web store, this study examines the factors that lead to an increased willingness by on-line consumers to purchase impulse items. Consistent with mental accounting and the psychophysics of prices, we find that people’s purchase of the impulse item increases with the total amount spent on other items. We also find that linking a US

The Motivational Properties of Tangible Incentives

1 donation to the impulse item, thereby providing a reason to purchase, increases the frequency of the impulse purchase.

Justifiability and the Motivational Power of Tangible Noncash Incentives

Employers who spend considerable sums on noncash tangible incentives need to document their effectiveness and investigate the best means of delivery.

Incentive Salience and Improved Performance

This article studies the motivational power of hedonic noncash incentives compared to the motivational power of an equivalent amount of cash. In a laboratory study, working adults who engaged in a challenging mental task performed better in pursuit of a noncash incentive than in pursuit of a cash incentive of equal cash value, even though they stated a preference to receive the cash award. Justification concerns regarding the consumption and purchase of luxurious hedonic goods are found to be a major cause of this behavioral inconsistency. These findings suggest that firms must be careful in asking employees what incentives they prefer, because the preferred incentive may not be the one that leads to the best performance.

The use of incentives in organizations

Using data from 441 call center employees at a large North American financial services firm, we studied how the frequency of thinking about an incentive available for performance led to increased output on an important performance metric. We find that people think more frequently about noncash tangible incentives (merchandise and travel) than cash incentives and that as the frequency of thought increases, performance increases. This leads to a larger performance boost for tangible incentives compared to a cash incentive of equal purchasing power. These results show an additional benefit from the use of tangible incentives and help answer the question regarding the psychological processes which make incentives motivating.

The Performance Effects of an Ability-Based Approach to Goal Assignment

Purpose – The authors aim to analyze actual practice in industry with respect to the use, choice, and effectiveness of four types of incentives, cash, prepaid cards, travel, and merchandise.Design/methodology/approach – The paper uses a survey of 170 practicing incentive design managers.Findings – Usage of cash and cards continue to increase but travel and merchandise are still frequently used.Originality/value – This will provide useful information to practitioners who design incentive programs.

The non-compensatory relationship between risk and return in business angel investment decision making

Some organizations have begun to target their goal-setting method more closely to the ability levels of their employees. In this article, we report the results of a laboratory study of 138 undergraduate students, which shows that these “ability-based” goals are more effective at improving performance than a “one goal for all” approach, where everyone is assigned the same performance target. Results from repeated measure tests and other analysis of variance tests show that lower-ability individuals in the ability-based goal condition outperform those in the one goal for all condition. Lower- and moderate-ability participants in the one goal for all condition also experienced larger decreases in performance in later rounds.

Incorrect Weighting of Absolute Performance in Self-Assessment

Abstract By analyzing observed interactions between entrepreneurs and business angels (BAs) on the Canadian reality TV show Dragons’ Den, we find that BAs use a non-compensatory decision-making process when evaluating anticipated risk and return. This is consistent with our hypotheses that BAs use decision heuristics (shortcuts) to conserve cognitive effort when deciding whether or not to invest in business opportunities proposed by entrepreneurs. Our results further our understanding of how and when behavioral decision theory can inform real-life BA investment decision processes. Additionally, the results offer practical implications for entrepreneurs interested in pitching proposals to BAs.

Business angel early stage decision making

Students spend much of their life in an attempt to assess their aptitude for numerous tasks. For example, they expend a great deal of effort to determine their academic standing given a distribution of grades. This research finds that students use their absolute performance, or percentage correct as a yardstick for their self-assessment, even when relative standing is much more informative. An experiment shows that this reliance on absolute performance for self-evaluation causes a misallocation of time and financial resources. Reasons for this inappropriate responsiveness to absolute performance are explored.