This project will study the mechanism behind and the consequences of "social comparisons" through experimental methods. Performance comparisons that individuals make with one another are usually important determinants of self-perception, which in turn affects subsequent behavior such as effort or persistence, and thereby outcomes. Social comparisons are commonplace in both organizational and educational settings, and their effects on behavior suggest that manipulating the availability and type of performance feedback can be an important tool for improving effort and performance in such settings.
Despite the broad psychology literature on the topic, there are few economic studies on performance comparisons, and their implications for organizational design have not been explored. Ertac (2005) proposes a theory of social comparisons, which models social comparisons as a source of information, where knowing how well others have done affects self-perception and effort through the information it provides about ability. Given the effects on behavior, the optimal information revelation policy of a principal who deals with multiple agents is studied. However, to be able to assess the validity of the policy implications from such a model, laboratory experiments that can shed light on the mechanism behind social comparisons are needed.
The current project proposes a set of such experiments designed to test the informational theory of social comparisons, and in general obtain insight into the mechanism behind social comparisons. The experiments are expected to provide valuable data for understanding the way social comparisons work and for formulating recommendations for information feedback policies in organizations, contributing to the understanding of an issue that is central to the economics, management, and psychology literatures.
The broader impact of this study for society would be to formulate recommendations for feedback and information disclosure policies to be applied in organizational and educational settings. How to structure performance and comparison feedback policies is an important question in organizational design, since such feedback usually affects employees' self-concept, subsequent motivation, and effort.
Another setting where social comparisons play an important role is education. Academic self-concept is known to be an important determinant of a student's motivation and effort in school, her aspirations of success, dropout decisions, and career choices. In turn, comparisons with the outcomes of peers are crucial in forming self-assessments. Policies that manipulate social comparison possibilities such as withholding information about the full distribution of grades, or forming specific peer groups (e.g. through ability grouping) can potentially have a strong influence on educational performance, especially when dealing with special groups, such as students with learning disabilities, gifted students, or students who are underrepresented in a particular area of study (e.g. women in science), where "confidence-management" is important. Understanding the mechanism behind social comparisons is therefore very important in formulating recommendations for information and grouping policies for both organizational and educational settings, and the proposed study is expected to provide valuable data and answers in this context, which could be communicated to educational programs and organizations. In addition to the expected results from the study, the way the study is conducted is also likely to have a general beneficial impact, in the sense that the study will involve experiments to be conducted at the CASSEL laboratory of UCLA, which draws participants from a diverse student body. The experiments are expected to promote intellectual interest in the areas of economics and psychology in the group of students that participate.
