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• Case | HBS Case Collection | March 2020

  Social Salary Setting at Spiber

  Ashley Whillans and John Beshears

  Can a “set your own salary” system boost employee happiness and motivation? Spiber made synthetic silk built from proteins mimicking the proteins found in spider silk, the world’s toughest known material by weight. Kazuhide Sekiyama and Junichi Sugahara established Spiber to create protein materials that would eventually compete effectively with petrochemical-based materials widely used in apparel, auto parts, and airplane components, among many other applications. From the beginning, they envisioned a team built on mutual respect and a common purpose. The executive team wanted the company’s compensation system to match the organization’s values. Thus, the company had implemented a unique salary-setting process designed to inspire autonomy and responsibility among employees: each employee retained the ultimate authority to choose his or her own salary. The members of the executive team were excited about the “set your own salary” system, but was it having the intended effect?

  Keywords: Compensation and Benefits; Motivation and Incentives; Happiness; Negotiation Tactics; Cross-Cultural and Cross-Border Issues; Biotechnology Industry; Japan; United States;

  Citation:

  Whillans, Ashley, and John Beshears. "Social Salary Setting at Spiber." Harvard Business School Case 920-050, March 2020.  View Details

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• Article | Journal of Personality and Social Psychology | March 2020

  Gender Differences in Communicative Abstraction

  Priyanka D. Joshi, Cheryl J. Wakslak, Gil Appel and Laura Huang

  Citation:

  Joshi, Priyanka D., Cheryl J. Wakslak, Gil Appel, and Laura Huang. "Gender Differences in Communicative Abstraction." Journal of Personality and Social Psychology 118, no. 3 (March 2020): 417–435.  View Details

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• Article | Journal of Public Economics | March 2020

  Which Early Withdrawal Penalty Attracts the Most Deposits to a Commitment Savings Account?

  John Beshears, James J. Choi, Christopher Harris, David Laibson, Brigitte C. Madrian and Jung Sakong

  Previous research has shown that some people voluntarily use commitment contracts that restrict their own choice sets. We study how people divide money between two accounts: a liquid account that permits unrestricted withdrawals and a commitment account that is randomly assigned in a between-subject design to have either a 10% early withdrawal penalty, or a 20% early withdrawal penalty, or not to allow early withdrawals at all (i.e., an infinite penalty). When the liquid account and the commitment account pay the same interest rate, higher early withdrawal penalties attract more commitment account deposits. This pattern is predicted by the hypothesis that some participants are partially or fully sophisticated present-biased agents. Such agents perceive that higher penalties generate greater scope for commitment by disincentivizing (penalized) early withdrawals. The experiment also shows that when the commitment account pays a higher interest rate than the liquid account, the positive empirical slope relating penalties and commitment deposits is flattened, suggesting that naïve present-biased agents or agents with standard exponential discounting are also in our sample. Across all of our experimental treatments, higher early withdrawal penalties on the commitment account sometimes increase and never reduce allocations to the commitment account.

  Keywords: quasi-hyperbolic discounting; present bias; sophistication; naiveté; commitment; Flexibility; savings; Contract Design; defined contribution retirement plan; 401 (k); IRA; Saving; Behavior; Contracts; Design; Interest Rates;

  Citation:

  Beshears, John, James J. Choi, Christopher Harris, David Laibson, Brigitte C. Madrian, and Jung Sakong. "Which Early Withdrawal Penalty Attracts the Most Deposits to a Commitment Savings Account?" Art. 104144. Journal of Public Economics 183 (March 2020).  View Details

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