Measuring the welfare and spillover effects of rank information

B-Tier
Journal: Journal of Economic Behavior and Organization
Year: 2023
Volume: 216
Issue: C
Pages: 187-220

Authors (2)

Zou, Wenbo (Nankai University) Gao, Wenzheng (not in RePEc)

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Rank information is often provided to improve task performance; however, its welfare and spillover effects have rarely been measured. To fill this gap, we conduct a controlled laboratory experiment in which participants complete a simple cognitive task and report their willingness-to-pay (WTP) to receive or avoid rank information provided in different manners and then make choices in subsequent games. We find that providing rank information with a full public announcement improves performance; however, the unconditional WTP results suggest that doing so brings a negative shift in the overall welfare of the participants in comparison to a partial or no announcement. Based on conditional WTP data, we find that participants' social comparison utilities are on average positive; it is the case even conditional on low rankings. In contrast, the public recognition utilities can be negative, while their negativity is reduced by adopting a partial announcement scheme, in which only the rankings of those among the top third are announced. Estimates from a structural estimation indicate that the partial public announcement scheme together with financial incentives is the most socially efficient intervention combination. Finally, no spillover effects are found in subsequent games.

Technical Details

RePEc Handle
repec:eee:jeborg:v:216:y:2023:i:c:p:187-220
Journal Field
Theory
Author Count
2
Added to Database
2026-01-29