Pushing Through or Slacking Off? Heterogeneity in the Reaction to Rank Feedback

32 Pages Posted: 18 Apr 2018

See all articles by Florian Hett

Florian Hett

Goethe University Frankfurt - Department of Management and Applied Microeconomics

Felix Schmidt

Johannes Gutenberg University Mainz

Date Written: April 16, 2018

Abstract

This paper studies heterogeneity in the reaction to rank feedback. In a laboratory experiment, individuals take part in a series of dynamic real-effort contests with intermediate feedback. To solve the identification problem in estimating the causal effect of rank feedback on subsequent effort provision we implement a random multiplier in the first round of each contest. The realization of this multiplier then serves as a valid instrument for rank feedback. While rank feedback has a robust effect on subsequent effort provision on average, an explicit analysis of between-subject heterogeneity reveals that a substantial fraction of participants in fact react entirely opposite than the aggregated results indicate. We further show that this heterogeneity has consequences for overall outcomes, thereby arguing that heterogeneous sensitivities to rank feedback could have implications for the design of various policies in education and organizations.

Keywords: heterogeneity, competitiveness; contest; rank feedback, relative performance evaluation

JEL Classification: C91

Suggested Citation

Hett, Florian and Schmidt, Felix, Pushing Through or Slacking Off? Heterogeneity in the Reaction to Rank Feedback (April 16, 2018). SAFE Working Paper No. 203. Available at SSRN: https://ssrn.com/abstract=3163498 or http://dx.doi.org/10.2139/ssrn.3163498

Florian Hett (Contact Author)

Goethe University Frankfurt - Department of Management and Applied Microeconomics ( email )

Germany

Felix Schmidt

Johannes Gutenberg University Mainz ( email )

Saarstrasse 21
Mainz, D-55099
Germany

Register to save articles to
your library

Register

Paper statistics

Downloads
43
Abstract Views
239
PlumX Metrics