On the Effects of Relative Performance Feedback in a Risk Elicitation Task: Evidence From a Lab Experiment

35 Pages Posted: 31 Aug 2018 Last revised: 18 Oct 2018

See all articles by Martin Huschens

Martin Huschens

Johannes Gutenberg University Mainz

Franz Rothlauf

Johannes Gutenberg University Mainz

Date Written: August 23, 2018

Abstract

This paper experimentally investigates the influence of different non-payoff-relevant feedback regimes on motivation, competitiveness and risk-taking behaviors in a risk elicitation task. We explore four feedback regimes: private feedback, full ranking feedback, top-5 ranking feedback, and non-ranking feedback based on the median performance of peers. We found that providing relative performance feedback increases risk-taking behavior, especially when using a top-5 ranking. Feedback regimes that provide a user with rank-based feedback have adverse effects on the users' attitudes as they increase competitiveness while failing to increase intrinsic motivation and performance motivation. In contrast, non-ranking feedback like the median feedback increases intrinsic motivation and does not influence competitiveness and risk-taking. Across all treatment groups, introducing relative performance feedback rules out the importance of a monetary compensation. From a management perspective, these results suggest that in situations where high risk decisions are problematic, non-ranking feedback should be preferred over rank-based feedback regimes.

Keywords: Relative Performance Feedback, Risk Elicitation, Risk Behavior, Motivation, Competitiveness, Lab Experiment

JEL Classification: D91, D81, C91, C83

Suggested Citation

Huschens, Martin and Rothlauf, Franz, On the Effects of Relative Performance Feedback in a Risk Elicitation Task: Evidence From a Lab Experiment (August 23, 2018). Available at SSRN: https://ssrn.com/abstract=3237466 or http://dx.doi.org/10.2139/ssrn.3237466

Martin Huschens (Contact Author)

Johannes Gutenberg University Mainz ( email )

Saarstr. 21
Jakob Welder-Weg 9
Mainz, Rhineland-Palatinate 55128
Germany

HOME PAGE: http://wi.bwl.uni-mainz.de/1377_DEU_HTML.php

Franz Rothlauf

Johannes Gutenberg University Mainz ( email )

Saarstrasse 21
Mainz, D-55099
Germany

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