The Effect of Performance Incentive Bonuses: Evidence from Running Backs in the NFL

I examine the effects of incentive bonuses on performance for running backs in the National Football League (NFL). My data suggest that a player with incentives in his contract does not adjust his level of effort depending on the amount of money he stands to earn. In fact, simply including incentive bonuses in a player\u27s contract does not influence his performance. This result suggests that incentives for running backs may not be necessary because their internal drive, as shown by a take-up rate that measures a player\u27s motivation to make money, is consistent across years. This cannot be concluded based on my study alone, but further research into this finding may provide further evidence and contribute to a more efficient system of structuring contracts in the NFL