Project 1: Cheating We use an online real-effort experiment to investigate how bonus-based pay and worker productivity interact with workplace cheating. Firms often use bonus-based compensation plans, such as group bonuses and firm-wide profit sharing, that induce considerable uncertainty in how much workers are paid. Exposing workers to a compensation scheme based on random bonuses makes them cheat more but has no effect on their productivity. We also find that more productive workers behave more dishonestly. We explain how these results suggest that workers’ cheating behavior responds to the perceived fairness of their employer’s compensation scheme. Project 2: Observation We propose a behavioural model of effort provision under a fixed wage payment scheme that accounts for competitive social preferences such as non-competitive self-esteem, competitive self-esteem and status-seeking. We designed and ran a sequence of controlled laboratory experiments that allow for the separation of these effects using four distinct combinations of relative performance feedback (explicit rank in a peer group) of three forms - none, computerised and personal, and either a private or a public information condition. All the data is collected using a real-effort task. Preliminary analysis reveals an important role for relative performance feedback in driving performance, despite the lack of tangible benefits. Moreover, we find evidence of reference-dependence over rank information

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