We provide an explanation for peer pressure in teams based on inequity aversion. Analyzing a two-period model with two agents, we …nd that the e¤ect of inequity aversion strongly depends on the information structure. When contributions are unobservable, agents act as if they were purely sel…sh. However, when contributions are made transparent at an interim stage, agents exert higher e¤orts in the …rst period and adjust their e¤orts according to the interim information in the second period. This form of peer pressure reduces free-riding and thus, more e¢ cient outcomes are attained. The results are con…rmed in a real e¤ort experiment.
In vielen psychologischen Studien wurde gezeigt, dass Performance-Feedback als Motivator innerhalb einer Arbeitsbeziehung wirkt. In diesem Papier soll nun die Wirkung von Feedback mit Methoden der Ökonomie untersucht werden. Dazu wird der Einfluss von Feedback auf die Arbeitsanstrengung des Agenten in einem einfachen Zweiperioden-Modell analysiert. Im zweiten Schritt werden die theoretischen Resultate in einem ökonomischen Experiment getestet. Im Modell führt Feedback (1) zu einer Anstrengungsanpassung in der zweiten Periode, (2) zu einem Anstieg des Gesamtnutzens des Agenten und (3) zu einer Steigerung des erwarteten Gesamtoutputs. Die Daten aus dem Experiment bestätigen die theoretischen Vorhersagen weitgehend. Feedback beeinflusst die Anstrengungswahl des Agenten, obwohl die Entlohnungsfunktion in den Fällen mit und ohne Feedback identisch ist. An Economic Analysis of Performance Feedback-Theory and experimental Evidence Many psychological studies provide evidence that performance feedback has an impact on employee motivation. In this paper we use economic methods to examine the role of performance feedback in employer-employee relationships. First, we analyze the effect of feedback on the employee's effort decision in a simple 2-period model. Second, we test the resulting hypotheses in an economic laboratory experiment. The theoretical results imply that the introduction of performance feedback leads to (1) an effort adjustment in the second period, (2) higher utility for the employee and (3) higher expected total output. The experimental data confirm the theoretical results to a large extent. Thus, the introduction of performance feedback indeed affects the employee's effort choice although the compensation function remains unchanged.
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