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Peer Effects under Different Relative Performance Feedback and Grouping Procedures

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  • Kathrin Thiemann
  • Niklas Wallmeier

Abstract

We investigate the role of peer-group composition and relative performance feedback in effort choice. In a theory-guided lab experiment, groups are formed either randomly or based on ability. The members receive either the best or the average performance of the group as feedback. We find that men perform better when they compare themselves with the best instead of the average peer, while the opposite is true for women. For the group composition, we find that men benefit from random grouping, while women benefit from ability grouping. These effects are explained by different (nonlinear) reactions to the reference point.

Suggested Citation

  • Kathrin Thiemann & Niklas Wallmeier, 2021. "Peer Effects under Different Relative Performance Feedback and Grouping Procedures," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 177(2), pages 178-204.
    • Handle: RePEc:mhr:jinste:urn:doi:10.1628/jite-2021-0008
    DOI: 10.1628/jite-2021-0008
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    More about this item

    Keywords

    laboratory experiment; ability grouping; relative performance feedback; peer effects; reference-dependent preferences;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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