Rank Incentives and Social Learning: Evidence From a Randomized Controlled Trial

47 Pages Posted: 25 Jun 2019

See all articles by Loretti Dobrescu

Loretti Dobrescu

University of New South Wales, School of Economics

Marco Faravelli

The University of Queensland

Rigissa Megalokonomou

University of Queensland - School of Economics

Alberto Motta

UNSW Australia Business School, School of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: June 19, 2019

Abstract

In a 1-year randomized controlled trial involving thousands of university students, we provide real-time private feedback on relative performance in a semester-long online assignment. Within this setup, our experimental design cleanly identifies the behavioral response to rank incentives (i.e., the incentives stemming from an inherent preference for high rank). We find that rank incentives not only boost performance in the related assignment, but also increase the average grade across all course exams taken over the semester by 0.21 standard deviations. These beneficial effects remain sizeable across all quantiles and extend beyond the time of the intervention. The mechanism behind these findings involves social learning: rank incentives make students engage more in peer interactions, which lead them to perform significantly better across the board. Finally, we explore the virtues of real-time feedback by analyzing a number of alternative variations in the way it is provided.

Keywords: relative performance feedback, rank incentives, social learning, academic performance, randomized controlled trial

JEL Classification: J24, J18

Suggested Citation

Dobrescu, Loretti Isabella and Faravelli, Marco and Megalokonomou, Rigissa and Motta, Alberto, Rank Incentives and Social Learning: Evidence From a Randomized Controlled Trial (June 19, 2019). Available at SSRN: https://ssrn.com/abstract=3406696 or http://dx.doi.org/10.2139/ssrn.3406696

Loretti Isabella Dobrescu (Contact Author)

University of New South Wales, School of Economics ( email )

High Street
Sydney, NSW 2052
Australia

Marco Faravelli

The University of Queensland ( email )

Australia

Rigissa Megalokonomou

University of Queensland - School of Economics ( email )

Brisbane, QLD 4072
Australia

Alberto Motta

UNSW Australia Business School, School of Economics ( email )

High Street
Sydney, NSW 2052
Australia

HOME PAGE: http://https://sites.google.com/site/albertomottaeconomics/

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