The Faster, the Better. When the Payoff Depends on Reaction Times in Natural Experiments

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 behaviour 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.