Research seminar: Felix Schmidt (University of Mainz, Germany)
Time: August 15th, 2018 (Wednesday) from 16.50 till 18.10
Place: 3A Kantemirovskaya st., room 358
Guest Speaker: Felix Schmidt
This paper studies heterogeneity in the reaction to rank feedback. In a laboratory experiment,
individuals take part in a series of dynamic real-effort contests with intermediate
feedback. To solve the identification problem in estimating the causal effect of rank feedback
on subsequent effort provision we implement a random multiplier in the first round of each
contest. The realization of this multiplier then serves as a valid instrument for rank feedback.
While rank feedback has a robust effect on subsequent effort provision on average, an explicit
analysis of between-subject heterogeneity reveals that a substantial fraction of participants
in fact react entirely opposite than the aggregated results indicate. We further show that this
heterogeneity has consequences for overall outcomes, thereby arguing that heterogeneous
sensitivities to rank feedback could have implications for the design of various policies in
education and organizations.
Joined work with Florian Hett.