Ruhr Economic Papers

Ruhr Economic Papers #328

Teaching in the Lab: Financial Incentives in the Education Process

by Christoph Helbach and Klemens Keldenich

University of Duisburg-Essen, RGS Econ, 04/2012, 25 S./p., 8 Euro, ISBN 978-3-86788-377-1 DOI: 10.4419/86788377



This study uses a laboratory experiment to analyze the effectiveness of performance-based monetary incentives in the teaching process. The process of knowledge transmission is recreated using a video-stream. Four different teacher payment schemes are compared, three of which depend on the student‘s success. Furthermore, the experiment is done with two different subject pools: prospective teachers and regular students. Results indicate that prospective teachers do not react to monetary incentives in the given task. However, regular students do react in the expected way: Teachers transmit a significantly higher share of their knowledge when paid according to student performance.

JEL-Classification: C91, D03, I21, J33

Keywords: Education; monetary incentives; video analysis