Informational Inequity Aversion and Performance

32 Pages Posted: 22 Feb 2019

See all articles by Iris Bohnet

Iris Bohnet

Harvard University - Harvard Kennedy School (HKS)

Farzad Saidi

Boston University - Questrom School of Business; Centre for Economic Policy Research (CEPR)

Date Written: February 10, 2019

Abstract

In labor markets, some individuals have, or believe to have, less data on the determinants of success than others, e.g., due to differential access to technology or role models. We provide experimental evidence on when and how informational differences translate into performance differences. In a laboratory tournament setting, we varied the degree to which individuals were informed about the effort-reward relationship, and whether their competitor received the same or a different amount of information. We find performance is adversely affected only by worse relative, but not absolute, informedness. This suggests that inequity aversion applies not only to outcomes but also to information that helps achieve them, and stresses the importance of inequality in initial information conditions for performance-dependent outcomes.

Keywords: tournament, information, inequity aversion, performance, effort task

JEL Classification: D81, D82, M50

Suggested Citation

Bohnet, Iris and Saidi, Farzad, Informational Inequity Aversion and Performance (February 10, 2019). HKS Working Paper No. RWP19-008; Boston University Questrom School of Business Research Paper No. 3339572. Available at SSRN: https://ssrn.com/abstract=3339572 or http://dx.doi.org/10.2139/ssrn.3339572

Iris Bohnet (Contact Author)

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States
617-495-5605 (Phone)
617-496-5747 (Fax)

Farzad Saidi

Boston University - Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA MA 02215
United States

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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