Whenever individuals receive feedback about how they perform, organizations also choose what to reveal about their peers' performance. I show theoretically that this choice changes how much effort individuals exert in anticipation of the feedback, even absent material consequences. This is because they care about how they compare to peers. Comparing effort across three feedback policies identifies two motives: a competitive motive to outperform peers, and an information motive to shape what they will learn about their own relative ability. In a lab experiment, I elicit each participant's effort under the three policies to quantify the motives at the individual level. I find that the competitive motive raises average effort and the information motive lowers it. Because individuals differ in these motives, changing the feedback policy also changes who performs best. Information about peers' performance is thus a cheap motivator, but it shapes the rankings that guide organizations' selection decisions.
Presented at: 2026 - PhD Workshop (Naples School of Economics); BID/BEE Seminar (Toulouse School of Economics); ESA (Universitat Pompeu Fabra); EEA (University College Dublin); ASFEE (Lille); Enter Jamboree (Universidad Carlos III de Madrid); FUR (University of Alicante); Job Market Workshop (Toulouse School of Economics); Workshop on Social Economy for Young Economists (University of Bologna); BEERS Seminar (GATE-LAB); 2023-2025 - BID/BEE Workshop (Toulouse School of Economics); PhD Workshop (Toulouse School of Economics).
Whenever individuals evaluate an outcome against a reference point formed in the past, they must remember that reference point. We show that this memory is imperfect and shapes how the outcome is evaluated. We survey high school students three times: before their final exams, and six and eighteen months after they receive their grade. In the first survey, we elicit the average grade they are aiming for and establish that this goal acts as a reference point. In the other two, we ask them to recall their stated goal and collect official transcript data. We find that the remembered goal causally shapes satisfaction. In line with our theoretical model, recalling a less ambitious goal raises satisfaction, which creates an incentive to manipulate memory in that direction. However, we find no evidence that students act on this incentive. Instead, recall is pulled toward the grade received, a pattern consistent with interference.
(Third survey is taking place on December 2026.)
Misperceptions are not always costly to those who hold them. We study a dynamic reputation model in which two types of agents, honests and liars, repeatedly choose between a prosocial and a selfish action. In each period, an excuse the audience does not observe may prevent the agent from acting prosocially. Otherwise, honests act prosocially, whereas liars can fake an excuse, weighing the gain from selfishness against its reputational cost. The audience can benefit from a misperception of how often excuses arise. This is because, when agents care about how they are perceived, what the audience infers from their behavior shapes the incentives they face. By changing how much a selfish action costs in reputation, a misperceived frequency of excuses changes liars' incentive to behave prosocially. Misperception can thus lead the audience to receive more help than accurate beliefs would, or to learn more about agents' types.