Question 1 of 8 Quiz: Rewards & Bonuses
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Do bonuses lead to better performances?
Researchers  set up an experiment to test the effects of the size of an economic reward on performance. To create an environment in which a person taking the test truly felt the reward to be substantial, tests were performed in rural India where a person's average monthly salary was about 500 rupees ($11). Six different games were set up: three of them were mind puzzles, while the other three were based on physical coordination.
Random people in rural India were asked to take the test; all of them were encouraged by the substantial economic rewards offered. The scale of reward varied from a week's salary up to a potential half- year's salary if they performed well enough. The participants were randomly awarded different scales of rewards resulting in high maximum payouts for some, and low payouts for others.
What was the effect of offering financial reward on solving the tasks?