Attention: This e natio paper is mostly based on the following paper: Della Vigna, S., & Pope, D. (2018). What motivates effort? Evidence and expert forecasts. The Review of Economic Studies, 85(2), 1029-1069. I attached this paper for you to read and refer to this paper in the questions below. You do not need to read the parts on forecasts (mostly page 1031- 1033; page 1043-1044; Page 1053-1066), which I have already struck out in the attached paper. 1. (20 points) Consider the following two conditions in the paper. . Condition 1A (from the Piece rate category): "Your score will not affect your payment in any way." . Condition 1B (from Pay enough or don't pay): "As a bonus, you will be paid an extra 1 cent for every 1,000 points that you score." The paper shows that the mean effort is 1521 for Condition IA, and 1883 for Condition 1B. a. (10 points) Provide a hypothesis to explain the reason that this paper finds no evidence in support for the crowding-out effect. b. (10 points) Sketch an experiment to test your hypothesis. 2. (20 points) Consider the following two conditions in the paper. . Condition 2A (from Piece rate category): "Your score will not affect your payment in any way." . Condition 2B (from Social preference: gift exchange category): "In appreciation to you for performing this task, you will be paid a bonus of 40 cents. Your score will not affect your payment in any way." The paper shows that the mean effort is 1521 for Condition 2A, and 1602 for Condition 2B. a. (10 points) Provide a hypothesis to explain the reason that this paper finds a small effect of unexpected gift. b. (10 points) Sketch an experiment to test your hypothesis. 3. (30 points) Consider the following three conditions in the paper. . Condition 3A (from Piece rate category): "As a bonus, you will be paid an extra 1 cent for every 100 points that you score." . Condition 3B (from Risk aversion and probability weighting category): "As a bonus, you will have a 50% chance of being paid an extra 2 cents for every 100 points that youscore. One out of two participants who perform this task will be randomly chosen to be paid this reward." Condition 3C (from Risk aversion and probability weighting category): "As a bonus, you will have a 1% chance of being paid an extra $1 for every 100 points that you score. One out of every 100 participants who perform this task will be randomly chosen to be paid this reward." The paper shows that the mean effort is 2029 for Condition 3A, 1977 for Condition 3B. and 1896 for Condition 3C. a. (10 points) Show theoretically whether expected utility can explain this pattern. b. (10 points) Show theoretically whether prospect theory can explain this pattern. c. (10 points) Provide an explanation that lottery piece rate incentive (Condition 3C) does not motivate more effort than fixed piece rate (Condition 3A). 4. (30 points) Consider the following three conditions in the paper. . Condition 4A (from Piece rate category): "As a bonus, you will be paid an extra 1 cent for every 100 points that you score." . Condition 4B (from Discounting category): "As a bonus, you will be paid an extra I cent for every 100 points that you score. This bonus will be paid to your account two weeks from today." . Condition 4C (from Discounting category): "As a bonus, you will be paid an extra 1 cent for every 100 points that you score. This bonus will be paid to your account four weeks from today." The paper shows that the average the mean effort is 2029 for Condition 4A, 2004 for Condition 4B, and 1970 for Condition 4C. a. (10 points) Show theoretically whether exponential discounting can explain this pattern. b. (10 points) Show theoretically whether quasi-hyperbolic discounting can explain this pattern. c. (10 points) In "Doing it Now or Later" model (Lecture 8), one important implication is that when the costs of an action are immediate and the rewards of the action are delayed, people tend to procrastinate. The comparison among these three conditions does not enable us to test this implication. Please sketch an experiment (similar to this paper on behavioural motivator for effort) to test this implication.5. (Bonus: 10 points) Please assess this paper critically. a. (5 points) Discuss one potential problem or limitation with the paper. Note that you should not use those problems or limitations that are already stated in the paper. b. (5 points) Discuss how you may address the problem or limitation you observed