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

50 Pages Posted: 7 Jul 2021

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: June 2021

Abstract

New digital technologies allow companies to provide managers with performance feedback in real-time. We provide evidence on 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 referees. Our results suggest that experienced agents 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 agents to correct wrong initial decisions upon feedback. In contrast, less experienced agents 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. Furthermore, we document that the effects of real-time feedback change over time as agents gain more experience under this system.

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 (June 2021). 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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