Philipp Ager, Leonardo Bursztyn, Joachim Voth, 14 January 2017

During World War II, the German military publicly celebrated the performance of its flying aces to incentivise their peers. This column uses newly collected data to show that, when a former colleague got recognition, flying aces performed much better without taking more risks, while average pilots did only slightly better but got themselves killed much more often. Overall the incentives may have been detrimental, which serves as a caution to those offering incentives to today's financial risk-takers.