The H. Gregg Lewis prize for the best paper published in the Journal of Labor Economics during 2004-2005 has been awarded to Pascal Courty [left] and Gerald Marschke [right] for their article An Empirical Investigation of Gaming Responses to Explicit Performance Incentives, which appeared in the January 2004 issue of the Journal.
The Prize Committee of David Autor (Chair), Lance Lochner and previous Lewis prize winner, Eric Gould selected the Courty and Marschke study from an exemplary group of papers. This article makes an ingenious and lasting contribution to the empirical analysis of gaming responses to economic incentives. Prior work has found that high-powered incentives may cause organizations to engage in non-productive actions, often called gaming. The critical contribution of the Courte and Marchke study is to establish empirically that such gaming may subvert an organization’s mission and degrade the quality of its product to the detriment of its customers. This paper will be cited for years to come by scholars of mechanism design, agency and organizational economics.