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In a series of five experiments, exactingness, or the extent to which deviations from optimal decisions are punished, is studied within the context of learning a repetitive decision-making task together with the effects of incentives. Results include the findings that (a) performance is an inverted-U shaped function of exactingness, (b) performance is better under incentives when environments are lenient but not when they are exacting, (c) the interaction between exactingness and incentives does not obtain when an incentives function fails to discriminate sharply between good and bad performance, and (d) when the negative effects of exactingness on performance are eliminated, performance increases with exactingness.
Hogarth et al. (Tue,) studied this question.