We study the effect of providing relative performance feedback information on performance under piece-rate incentives. A natural experiment that took place in a high school offers an unusual opportunity to test this effect in a real-effort setting. For one year only, students received information that allowed them to know whether they were above (below) the class average as well as the distance from this average. We exploit a rich panel data set and find that the provision of this information led to an increase of 5% in students' grades. Moreover, the effect was significant for the whole distribution. However, once the information was removed the effect disappeared. To rule out the concern that the effect may be driven by teachers within the school, we verify our results using national level exams (externally graded) for the same students, and the effect remains.
We discuss the contribution of the experimental literature to the understanding of both traditional and previously unexplored dimensions of gender differences and discuss their bearings on labor market outcomes. Experiments have offered new findings on gender discrimination, and while they have identified a bias against hiring women in some labor market segments, the discrimination detected in field experiments is less pervasive than that implied by the regression approach. Experiments have also offered new insights into gender differences in preferences: to gain less from negotiation, women appear to have lower preferences than men for risk and competition and may be more sensitive to social cues. These gender differences in preferences also have implications in group settings, whereby the gender composition of a group affects team decisions and performance. Most of the evidence on gender traits comes from the lab, and key open questions remain as to the source of gender preferences-nature versus nurture, or their interaction-and their role, if any, in the workplace.JEL classification: J16, J24, J71, C91, C92, C93
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We investigate whether the gender composition of teams affect their economic performance. We study a large business game, played in groups of three, where each group takes the role of a general manager. There are two parallel competitions, one involving undergraduates and the other involving MBAs. Our analysis shows that teams formed by three women are significantly outperformed by any other gender combination, both at the undergraduate and MBA levels. Looking across the performance distribution, we find that for undergraduates, three women teams are outperformed throughout, but by as much as 10pp at the bottom and by only 1pp at the top. For MBAs, at the top, the best performing group is two men and one woman. The differences in performance are explained by differences in decision-making. We observe that three women teams are less aggressive in their pricing strategies, invest less in R&D, and invest more in social sustainability initiatives, than any other gender combination teams. Finally, we find support for the hypothesis that it is poor work dynamics among the three women teams that drives the results.
Some authors have suggested that deregulation of product and labour markets is responsible for the decline in Labour's share of GDP. A simple model predicts that privatization is associated with a lower labour share, due to job shedding. We test this hypothesis by focusing on privatization of network industries in the OECD. We find that, on average, privatization accounts for a fifth of the fall of Labour's share, and over half in Britain and France. This is due to lower employment, but it is partially offset by higher wages and falling barriers to entry, which dampen profit margins.
We study the effect of providing relative performance feedback information on performance under piece-rate incentives. A natural experiment that took place in a high school offers an unusual opportunity to test this effect in a real-effort setting. For one year only, students received information that allowed them to know whether they were above (below) the class average as well as the distance from this average. We exploit a rich panel data set and find that the provision of this information led to an increase of 5% in students' grades. Moreover, the effect was significant for the whole distribution. However, once the information was removed the effect disappeared. To rule out the concern that the effect may be driven by teachers within the school, we verify our results using national level exams (externally graded) for the same students, and the effect remains.
This paper documents and studies the gender gap in performance among associate lawyers in the United States. Unlike other high-skilled professions, the legal profession assesses performance using transparent measures that are widely used and comparable across firms: the number of hours billed to clients and the amount of new client revenue generated. We find clear evidence of a gender gap in annual performance with respect to both measures. Male lawyers bill ten percent more hours and bring in more than twice the new client revenue than do female lawyers. We demonstrate that the differential impact across genders in the presence of young children and differences in aspirations to become a law firm partner account for a large share of the difference in performance. We also show that accounting for performance has important consequences for gender gaps in lawyers' earnings and subsequent promotion. Whereas individual and firm characteristics explain up to 50 percent of the earnings gap, the inclusion of performance measures explains a substantial share of the remainder.Performance measures also explain a sizeable share of the gender gap in promotion.
This paper studies the effect of providing relative performance feedback on individuals’ performance, under two incentive schemes. In a laboratory setup, agents perform a real‐effort task. We show that relative performance feedback increases performance when performance is related to pay (piece‐rate) but has no effect on performance when pay is independent of performance (flat‐rate). These effects are independent of the agent's relative position. Subjects are also asked to rate their satisfaction during the experiment. We find that under flat‐rate, feedback has no effect on agents’ satisfaction, while under piece‐rate, feedback about relative position affects satisfaction.
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