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Is timely information always better? The effect of feedback frequency on decision making

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  • Lurie, Nicholas H.
  • Swaminathan, Jayashankar M.
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    Abstract

    Recent advances in information technology make it possible for decision makers to track information in real-time and obtain frequent feedback on their decisions. From a normative sense, an increase in the frequency of feedback and the ability to make changes should lead to enhanced performance as decision makers are able to respond more quickly to changes in the environment and see the consequences of their actions. At the same time, there is reason to believe that more frequent feedback can sometimes lead to declines in performance. Across four inventory management experiments, we find that in environments characterized by random noise more frequent feedback on previous decisions leads to declines in performance. Receiving more frequent feedback leads to excessive focus on and more systematic processing of more recent data as well as a failure to adequately compare information across multiple time periods. These results suggest that caution be used in the design and implementation of real-time information systems.

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    Bibliographic Info

    Article provided by Elsevier in its journal Organizational Behavior and Human Decision Processes.

    Volume (Year): 108 (2009)
    Issue (Month): 2 (March)
    Pages: 315-329

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    Handle: RePEc:eee:jobhdp:v:108:y:2009:i:2:p:315-329

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    Web page: http://www.elsevier.com/locate/obhdp

    Related research

    Keywords: Information frequency Decision frequency Feedback Decision making Newsvendor Performance;

    References

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    Cited by:
    1. Schiffels, Sebastian & Fügener, Andreas & Kolisch, Rainer & Jens Brunner, O., 2014. "On the assessment of costs in a newsvendor environment: Insights from an experimental study," Omega, Elsevier, vol. 43(C), pages 1-8.
    2. Lam, Chak Fu & DeRue, D. Scott & Karam, Elizabeth P. & Hollenbeck, John R., 2011. "The impact of feedback frequency on learning and task performance: Challenging the “more is better” assumption," Organizational Behavior and Human Decision Processes, Elsevier, vol. 116(2), pages 217-228.
    3. Strohhecker, Jürgen & Größler, Andreas, 2013. "Do personal traits influence inventory management performance?—The case of intelligence, personality, interest and knowledge," International Journal of Production Economics, Elsevier, vol. 142(1), pages 37-50.
    4. Rick, Scott & Weber, Roberto A., 2010. "Meaningful learning and transfer of learning in games played repeatedly without feedback," Games and Economic Behavior, Elsevier, vol. 68(2), pages 716-730, March.
    5. Elahi, Ehsan & Lamba, Narasimha & Ramaswamy, Chinthana, 2013. "How can we improve the performance of supply chain contracts? An experimental study," International Journal of Production Economics, Elsevier, vol. 142(1), pages 146-157.

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