Like Oscar Wilde said (I think), “I can resist anything except temptation”.  More here.

A long literature in psychology, as well as a more recent theory literature in economics, suggests that prolonged exposure to a tempting stimulus can eventually lead people to ¨Dsuccumb¡¬ to that temptation. Here we develop a model for decision under temptation, and test its predictions using data from a natural experiment. We take advantage of naturally occurring, exogenous variation in the amount of time individual consumers spend waiting in grocery store checkout lines. We collect over 2,800 observations from three grocery stores. We obtain robust evidence that time spent in line economically and statistically significantly increases the probability that one purchases a tempting item. For example, people who wait in line 25 percent longer than average are about 17 percent more likely to purchase a tempting item. Moreover, for any fixed time in line, we find that the presence of a child significantly increases the likelihood of a purchase. These results are consistent with models that connect purchasing decisions to temptation, and also suggest that children yield to temptation more rapidly than adults. Our results offer novel quantitative and empirical content to the rapidly expanding economics literature on decisions under temptation.

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13 years ago

Speaking of behavioural studies that have a link to economics, supposedy someone has determined that in certain cases, offers of bonus pay can actually reduce performance. What would be interesting would be a study where bonuses were given without being promised beforehand, but were given out in a non-predictable fashion (i.e. in one round, it might be that only the best performer gets a large bonus, in the next, it might be that the top 3 each get a small bonus, in some rounds there may be no bonus at all).
If it really is true in the general case that bonuses can reduce performance, it’s hard to understand why bonuses are so widely used through various industries.