Earning Extra Credit or Losing Extra Credit? A Classroom Experiment on Framing Incentives as Gains or Losses

This exploratory study examines if the way incentives are framed (gains versus losses) impacts how students respond to them. Sixty-two students in two sections of the same undergraduate Marketing course were offered the incentive of an optional final exam by answering correctly quiz questions throughout the semester. One section received the incentive as a gain (opportunity to earn an optional final exam if you get enough quiz points) whereas the other section received it as a loss (final is optional, but you may lose it if you don’t get enough quiz points). Consistent with the principles of loss aversion, framing the incentive as a loss was more successful in motivating students in quiz performance. This study provides interesting insight to educators about rethinking how we frame incentives to our students