A Real-Effort Task With Endogenous Work Environment

Experimental economics studies using real-effort offer a better match with the field environment than stated-effort studies, incorporating the psychological aspects affecting effort provision. However, this literature does not analyze how subjects choose the environment in which they work but rather studies effort provision within an exogenously given setting. This paper introduces a new task in which the experimenter offers a menu of costly inputs levels that increase the chance of success, and the subject chooses the levels that define their working environment subject to a budget constraint. We present an application of this task when there is a shock to input prices. We further release an open-access platform, AREPA (Allocation-based Real Effort Production App), which allows researchers to access and set up the task for teaching and research purposes