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Strategic feedback in teams: Theory and experimental evidence

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  • Ertac, Seda
  • Gümren, Mert
  • Koçkesen, Levent

Abstract

We theoretically and experimentally analyze public and private feedback in teams that are characterized by different performance technologies. We consider a setting where the principal has some performance relevant private information and can either report this information truthfully or strategically withhold feedback. We find that if team performance is determined by the best performer (the “best-shot technology”), then both public and private feedback are better than no feedback unless the team is composed of all low performers, in which case no feedback is best. If, on the other hand, team performance is determined by the worst performer (the weakest-link technology), then no feedback is the best regime unless the team is composed of all high performers, in which case public or private feedback is better. Our results have implications for feedback policies in teams, organizations, and the workplace.

Suggested Citation

  • Ertac, Seda & Gümren, Mert & Koçkesen, Levent, 2019. "Strategic feedback in teams: Theory and experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 162(C), pages 1-23.
  • Handle: RePEc:eee:jeborg:v:162:y:2019:i:c:p:1-23
    DOI: 10.1016/j.jebo.2019.04.005
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    Cited by:

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    2. Coutts, Alexander, 2019. "Testing models of belief bias: An experiment," Games and Economic Behavior, Elsevier, vol. 113(C), pages 549-565.
    3. Dietrichson, Jens & Gudmundsson, Jens & Jochem, Torsten, 2022. "Why don’t we talk about it? Communication and coordination in teams," Journal of Economic Behavior & Organization, Elsevier, vol. 197(C), pages 257-278.
    4. Goulas, Sofoklis & Megalokonomou, Rigissa, 2021. "Knowing who you actually are: The effect of feedback on short- and longer-term outcomes," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 589-615.
    5. Ingebretsen Carlson, Jim & Wu, Tingting, 2022. "Shill bidding and information in eBay auctions: A Laboratory study," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 341-360.
    6. Alexander Coutts & Boon Han Koh & Zahra Murad, 2024. "The signals we give: Performance feedback, gender, and competition," Working Papers in Economics & Finance 2024-02, University of Portsmouth, Portsmouth Business School, Economics and Finance Subject Group.

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    More about this item

    Keywords

    Lab experiments; Feedback; Teams; Strategic communication; Disclosure games; Multiple audiences;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation

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