A central issue in designing incentive contracts is the decision to reward agents’ input use versus outputs. The trade-off between risk and return to innovation in production can also lead agents with varying skill levels to perform differentially under different contracts. We study this issue experimentally, observing and verifying inputs and outputs in Indian maternity care. We find that both contract types achieve comparable reductions in postpartum hemorrhage rates, but payments for outputs were four times that of inputs. Providers with varying qualifications performed equivalently under input incentives, while providers with advanced qualifications may have performed better under output contracts.
Authors
Research Fellow University College London
Marcos is a Research Fellow at IFS, an Affiliate at the Rural Education Action Program and a Professor of Economics at the University College London.
Grant Miller
Manoj Mohanan
Katherine Donato
Yulya Truskinovsky
Journal article details
- DOI
- 10.1257/app.20190220
- Publisher
- American Economic Association
- JEL
- D82, D86, I12, J13, J16, J41, O15
- Issue
- Volume 13, Issue 4, October 2021, pages 34-69
Suggested citation
Donato, K et al. (2021). 'Different strokes for different folks? Experimental evidence on the effectiveness of input and output incentive contracts for health care providers with varying skills' 13(4/2021), pp.34–69.
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