This paper provides experimental evidence on how informational differences may translate into performance differences in competitive environments. In a laboratory tournament setting, we manipulate beliefs about the effort-reward relationship by varying how much information people receive on the potential impact of luck on outcomes. We find that an informational disadvantage worsens the understanding of the effort-reward relationship, and significantly lowers performance. Our study is inspired by informational differences in the labor market where some individuals have less data on the determinants of economic success than others -- due to social networks or the availability of similar others to learn from.
Iris Bohnet, Professor of Public Policy, is a behavioral economist at Harvard Kennedy School, combining insights from economics and psychology to improve decision-making in organizations and society, often with a gender or cross-cultural perspective. She is the author of What Works: Gender Equality by Design, published by Harvard University Press in 2016. Her most recent research examines behavioral design to de-bias how we live, learn and work. Professor Bohnet served as the academic dean of the Kennedy School, is the director of its Women and Public Policy Program, the co-chair (with Max Bazerman) of the Behavioral Insights Group, an associate director of the Harvard Decision Science Laboratory, and the faculty chair of the executive program “Global Leadership and Public Policy for the 21st Century” for the World Economic Forum’s Young Global Leaders. She serves on the boards of directors of Credit Suisse Group and University of Lucerne, as well as the advisory boards of the Vienna University of Economics and Business, EDGE and Applied, as well as numerous academic journals. She is a member of the Global Agenda Council on Behavior of the World Economic Forum.