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The Value of Verbal Feedback in Allocation Decisions

Robert J., Schmidt ; Christiane, Schwieren ; Martin, Vollmann

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Abstract

Depending on the context at hand, people’s preference for receiving feedback might differ. Especially in allocation decisions that directly concern another individual, feedback from the affected person can have positive or negative value. We study such preferences in a laboratory experiment by eliciting the willingness-to-pay to receive or to avoid verbal feedback from subjects that were previously affected by an allocation decision. We find that most decision makers exhibit a positive willingness-to-pay for having control about whether feedback occurs or not. Specifically, decision makers that equally shared their endowment with the recipient revealed a positive willingness-to-pay for receiving, but not for avoiding feedback. By contrast, among decision makers that behaved selfishly, we identify both: subjects that were willing to pay for receiving and subjects that were willing to pay for avoiding feedback. The stated motivations indicate that curiosity, the desire to receive social approval and giving the recipient the chance to express his/her feelings are the main reasons for feedback acquisition, while shame and fear of negative feedback are the main reasons for avoidance.

Item Type: Working paper
Series Name: Discussion Paper Series / University of Heidelberg, Department of Economics
Volume: 0677
Place of Publication: Heidelberg
Date Deposited: 28 Feb 2020 15:14
Date: February 2020
Number of Pages: 20
Faculties / Institutes: The Faculty of Economics and Social Studies > Alfred-Weber-Institut for Economics
Subjects: 330 Economics
Uncontrolled Keywords: feedback, communication, non-instrumental information, social preferences, information avoidance, curiosity
Schriftenreihe ID: Discussion Paper Series / University of Heidelberg, Department of Economics
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