The Effects of Real-Time Feedback on Effort and Performance: Evidence from a Natural Quasi-Experiment

New digital technologies allow companies to provide employees with performance feedback in real-time. We investigate the causal effects of such real-time feedback on individual effort and the quality of initial (pre-feedback) and final (post-feedback) decisions by exploiting a natural quasi-experiment in the setting of professional soccer refereeing. Our results suggest that real-time feedback has differential effects for experienced compared to inexperienced individuals. Specifically, we find that experienced individuals decrease their effort under real-time feedback without harming the quality of their initial decisions. This results in better final decisions because real-time feedback allows individuals to correct wrong initial decisions upon feedback. In contrast, inexperienced individuals increase their effort but make worse initial decisions. Upon feedback, they manage to compensate for their increased number of wrong initial decisions but see no improvement in the quality of final decisions.