To Each Their Own: Heterogeneity in Worker Preferences for and Responses to Peer Information

TL;DR

This study reveals significant heterogeneity in worker preferences for peer performance information and demonstrates that tailored feedback policies can substantially improve workplace welfare.

Contribution

It provides empirical evidence on diverse worker responses to peer information and shows that customizing feedback timing enhances overall welfare.

Findings

15% of workers pay to avoid peer information due to stress

Tailored feedback timing increases welfare by up to 48%

Worker effort responses are strongly predicted by their information preferences

Abstract

Information about peers' performance is pervasive in workplaces, yet its effects on worker behavior are mixed. We show that a key reason is that workers differ in how they value such information. In a real-effort experiment with 793 workers, we elicit willingness-to-pay for peer information delivered either before or after the task. We document substantial heterogeneity in demand for peer information: some workers are indifferent, some prefer to avoid it before the task, and others value it more as their relative performance increases. These differences strongly predict effort responses to peer information. Notably, 15% of workers would pay to avoid information ex ante due to stress and exhibit no productivity gains from it. We further show that uniform feedback policies can impose welfare losses on such workers, while tailoring the timing of peer information increases welfare by up to 48%. Our results highlight the importance of accounting for heterogeneous information preferences when designing workplace feedback policies.