Do piece rates influence effort choices? Evidence from stadium vendors

This paper analyzes the daily sales performance of stadium vendors over an entire baseball season. The vendors were paid a pure commission on their sales, but the commission rate varied across vendors. Estimates that allow for a vendor-specific fixed effect in sales performance reveal that the elasticity of sales with respect to demand conditions at the game varies systematically across groups of vendors facing different commission rates. This finding strongly suggests that the commission rate that a vendor faces influences the choice of effort