Biased
 Information 
and
 Effort

Julie Rosaz (1)

1 GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne

We study the impact of information manipulation by a principal on the agent's effort. In a context of asymmetric information at the principal's advantage, we test experimentally the principal's willingness to bias (overestimate or under-estimate) the information she gives to her agent on his ability in order to motivate him to exert more effort. We find that i) principals do bias information, ii) agents trust the cheap-talk messages they receive and adjust their effort accordingly. Therefore, biased messages improve both the agent's performance and thus the principal's profit. This, however, does not increase efficiency. We also find that over-estimation occurs much more often than under-estimation. Making the signal costly in an additional treatment reduces this effect.

Mots clés: information; feedback; bias; motivation; experiment

Mots clés: biais; expérience

Domaines: Economies et finances

Julie Rosaz. Biased
 Information 
and
 Effort. Economic Inquiry, 2012, 50 (2), pp. 484-501. ⟨halshs-00527563⟩