Review of Behavioral Economics > Vol 4 > Issue 2

The Faster the Better: When the Payoff Depends on Reaction Times in a Natural Experiment

Matteo Migheli, University of Torino and CeRP-Collegio Carlo Alberto, Italy,
Suggested Citation
Matteo Migheli (2017), "The Faster the Better: When the Payoff Depends on Reaction Times in a Natural Experiment", Review of Behavioral Economics: Vol. 4: No. 2, pp 135-151.

Publication Date: 13 Sep 2017
© 2017 M. Migheli
JEL Code: C90
Reaction times (RT)Natural experimentInstinctivenessCognitive processes


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In this article:
1. Introduction 
2. Related Literature 
3. Data and Methodology 
4. Results 
5. Discussion and conclusion 


Studies in experimental economics have recently started using reaction times to better understand the cognitive processes behind decisions. This paper explores an issue that is so far uncovered by the economics literature: whether reaction times respond to incentives. I analyse the outcome of a natural experiment (the behavior of athletes at the World Swimming Championships) in three steps, where only the (expected) payoff increases from one step to the next. The payoff depends on the time of the race, of which the RT is part. Considering, for each competition, a homogeneous sample of swimmers, the paper shows that RTs decrease as the expected payoff increase. The observed reductions are comparable in magnitude to those observed in other experiments, where conscious/ cognitive process are induced (or, at least, present). The paper concludes that a share of the observed RTs is determined through cognitive processes.