| Abstract: |
This paper studies the effect of providing relative performance feedback
information on individuals' performance and affective response, under both
piece-rate and flat-rate incentives. In a laboratory setup, agents perform a
real effort task and when receiving feedback, they are asked to rate their
happiness, arousal and feeling of dominance. Control subjects learn only their
absolute performance, while the treated subjects additionally learn the
average performance in the session. Under piece-rate, performance is 17
percent higher when relative performance feedback is provided. Furthermore,
although feedback increases the performance independent of the content (i.e.,
performing above or below the average), the content is determinant for the
affective response. When subjects are treated, the inequality in the happiness
and the feeling of dominance between those subjects performing above and below
the average increases by 8 and 6 percentage points, respectively. Under
flat-rate, we do not find any effect on either of the outcome variables. |