Publications
Publications
- Summer 2017
- RAND Journal of Economics
Performance Feedback in Competitive Product Development
By: Daniel P. Gross
Abstract
Performance feedback is ubiquitous in competitive settings where new products are developed. This article introduces a fundamental tension between incentives and improvement in the provision of feedback. Using a sample of 4,294 commercial logo design tournaments, I show that feedback reduces participation but improves the quality of subsequent submissions, with an ambiguous effect on high-quality output. To evaluate this trade-off, I develop a procedure to estimate agents' effort costs and simulate counterfactuals under alternative feedback policies. The results suggest that feedback on net increases the number of high-quality ideas produced and is thus desirable for a principal seeking innovation.
Keywords
Feedback; Evaluation; Tournaments; Innovation; Performance Evaluation; Motivation and Incentives; Rank and Position; Product Development; Learning
Citation
Gross, Daniel P. "Performance Feedback in Competitive Product Development." RAND Journal of Economics 48, no. 2 (Summer 2017): 438–466.