Performance Feedback in Competitive Product Development

Journal Article (Academic article)

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 four thousand 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 tradeoff, 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.

Full Text

Duke Authors

Cited Authors

  • Gross, DP

Published Date

  • May 2017

Published In

Volume / Issue

  • 48 / 2

Start / End Page

  • 438 - 466

Published By

International Standard Serial Number (ISSN)

  • 0741-6261

Digital Object Identifier (DOI)

  • 10.1111/1756-2171.12182

Language

  • en