Melbourne Institute Brown Bag
Melbourne Institute Seminar Room
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Title: Peer Effects Under Different Relative Performance Feedback and Grouping Procedures
Abstract: We conduct a laboratory experiment to test theoretical predictions about subjects' performance in an effort task conditional on their peer group's composition and relative performance feedback. Subjects are grouped either randomly or according to their ability, with the feedback being the maximum or average performance of their group. We are able to support theory-driven hypotheses on the influence of ability, competitiveness and loss aversion on optimal performance in the presence of peer effects. While random grouping is beneficial for male subjects it is detrimental for female subjects. With respect to the reference point we find male subjects performing significantly better when they compare themselves to the best peer instead of the average, while the opposite is true for females.
Presenter: Niklas Wallmeier, University of Hamburg, Germany
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