Interpreting a Social Reference Point: Peer Performance Feedback and Exploration-Exploitation

2021 ◽  
Vol 2021 (1) ◽  
pp. 10687
Author(s):  
Oliver Baumann ◽  
Daniel Newark ◽  
Franziska Sump
2018 ◽  
Vol 38 (4) ◽  
pp. 250-254 ◽  
Author(s):  
Renée A. Scheepers ◽  
Myra van den Goor ◽  
Onyebuchi A. Arah ◽  
Maas Jan Heineman ◽  
Kiki M. J. M. H. Lombarts

2021 ◽  
Vol 12 ◽  
Author(s):  
Meyrav Shoham ◽  
Nira Munichor

People can use social or personal information as a reference point against which they compare their performance. While previous research has shown that reference point choice can be affected by individual characteristics, situational factors, and goals, we suggest that properties of the performance feedback itself can also play a role in this choice. We focus on the effects of round vs. precise numerical feedback on reference point preferences. In three studies, we show that people are more likely to use themselves as a reference point to evaluate their performance following a feedback in the form of a round score (e.g., a score of 70 in a task) and to use others as a reference point following a precise score (e.g., a score of 71). Study 1 shows decreased interest in comparisons with others following round rather than precise feedback. Study 2 shows that round (vs. precise) feedback also increases actual choice of the self (vs. others) as a reference point. Study 3 demonstrates that the effect of the numerical feedback on reference point preferences extends to the choice of a benchmark for future comparisons. We discuss the implications of our results for the literature and practice, including how this can be used to encourage desirable behaviors.


2020 ◽  
pp. 014920632091622 ◽  
Author(s):  
Yang Ye ◽  
Wei Yu ◽  
Robert Nason

Firms use aspirations to regulate innovative search activities, but peer and historical referents may contain different signals regarding performance feedback. Integrating insights from the literature on profit persistence with the behavioral theory of the firm, we propose a persistence-based framework of organizational innovative search that connects the persistence characteristics of feedback from peer and historical referents with innovative search. We first predict that feedback from peer referents is more persistent than feedback from historical referents. Further, we theorize that peer performance feedback produces more pronounced effects: Performance above (below) peer aspiration leads to less (more) innovative search compared with performance above (below) the historical aspiration level. In addition, because industries impose heterogeneous levels of profit persistence, the differential effect between peer and historical performance feedback on innovative search is likely to be more evident in highly persistent industries. Examining the research-and-development intensity of a comprehensive panel of Compustat manufacturing firms over the past 45 years, our results from quasi–maximum likelihood analysis and fixed-effect panel regression largely support our theoretical development. Our study extends a nascent understanding of aspiration heterogeneity by revealing and empirically confirming the critical role of persistence.


2011 ◽  
Author(s):  
Guangzhi Zhao ◽  
Connie Pechmann ◽  
Joyce Claterbos

Author(s):  
Andrew H. Newman ◽  
Bryan R. Stikeleather ◽  
Nathan J. Waddoups

Employees often make recurring decisions that entail deciding whether to continue using a “status quo” strategy that yields reliable results or try an alternative strategy of unknown efficacy. Via an experiment, we study how relative performance information (RPI)  influences this choice and its expected outcome. We theorize and find that RPI has both a social motivational effect that increases employees’ propensity to explore alternative strategies and an informational effect that helps them determine whether exploring alternative strategies will likely help or harm their performance (i.e., it conveys decision-facilitating benefits). Likewise, as predicted, we also find that RPI’s decision-facilitating benefit occurs more strongly among low- versus high-performing employees. Our study helps inform employers about the decision-facilitating implications of incorporating RPI into their performance feedback systems.


2018 ◽  
Vol 39 (2) ◽  
pp. 99-106 ◽  
Author(s):  
Michał Białek ◽  
Przemysław Sawicki

Abstract. In this work, we investigated individual differences in cognitive reflection effects on delay discounting – a preference for smaller sooner over larger later payoff. People are claimed to prefer more these alternatives they considered first – so-called reference point – over the alternatives they considered later. Cognitive reflection affects the way individuals process information, with less reflective individuals relying predominantly on the first information they consider, thus, being more susceptible to reference points as compared to more reflective individuals. In Experiment 1, we confirmed that individuals who scored high on the Cognitive Reflection Test discount less strongly than less reflective individuals, but we also show that such individuals are less susceptible to imposed reference points. Experiment 2 replicated these findings additionally providing evidence that cognitive reflection predicts discounting strength and (in)dependency to reference points over and above individual difference in numeracy.


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