Informational Differences and Performance: Experimental Evidence

Abstract:

This paper provides experimental evidence on how informational differences may translate into performance differences in competitive environments. In a laboratory tournament setting, we manipulate beliefs about the effort-reward relationship by varying how much information people receive on the potential impact of luck on outcomes. We find that an informational disadvantage worsens the understanding of the effort-reward relationship, and significantly lowers performance. Our study is inspired by informational differences in the labor market where some individuals have less data on the determinants of economic success than others due to social networks or the availability of similar others to learn from.

Publisher's Version

Last updated on 08/20/2014