The Effects of Real-Time Feedback on Effort and Performance: Evidence from a Natural Quasi-Experiment

45 Pages Posted: 7 Jul 2021 Last revised: 12 Jul 2022

See all articles by Maximilian Margolin

Maximilian Margolin

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM)

Marko Reimer

WHU - Otto Beisheim School of Management

Daniel Schaupp

WHU - Otto Beisheim School of Management

Date Written: July 12, 2022

Abstract

New digital technologies allow companies to provide employees with performance feedback in real-time. We investigate the causal effects of such real-time feedback on individual effort and the quality of initial (pre-feedback) and final (post-feedback) decisions by exploiting a natural quasi-experiment in the setting of professional soccer refereeing. Our results suggest that real-time feedback has differential effects for experienced compared to inexperienced individuals. Specifically, we find that experienced individuals decrease their effort under real-time feedback without harming the quality of their initial decisions. This results in better final decisions because real-time feedback allows individuals to correct wrong initial decisions upon feedback. In contrast, inexperienced individuals increase their effort but make worse initial decisions. Upon feedback, they manage to compensate for their increased number of wrong initial decisions but see no improvement in the quality of final decisions.

Keywords: feedback, decision support, decision control, quasi-experiment, sports data

JEL Classification: D91, M12, M41, M50, M54, O33

Suggested Citation

Margolin, Maximilian and Reimer, Marko and Schaupp, Daniel, The Effects of Real-Time Feedback on Effort and Performance: Evidence from a Natural Quasi-Experiment (July 12, 2022). Available at SSRN: https://ssrn.com/abstract=3874979 or http://dx.doi.org/10.2139/ssrn.3874979

Maximilian Margolin (Contact Author)

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Rotterdam, 3000 DR
Netherlands

Marko Reimer

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany

Daniel Schaupp

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany

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