Objective Standards Matter Too Much: The Use and Abuse of Absolute and Comparative Performance Feedback in Absolute and Comparative Judgments and Decisions

We explored the effects of absolute and comparative feedback on self-evaluations, decisions under uncertainty, performance attribution, and perceived relevance of the task to one’s self-concept. Participants (415 undergraduates) were told they had gotten 20% correct, 80% correct, or were not given then their scores on a practice test. Orthogonal to this manipulation, participants learned that their performance placed them in the 23 percentile or 77 percentile, or they did not receive comparative feedback. They were then given a chance to place bets on two games – one in which they needed to get more than 50% right to double their money (absolute bet), and one in which they needed to beat more than 50% of other test-takers (comparative bet). Absolute feedback influenced comparative betting, particularly when no comparative feedback was available. Comparative feedback exerted weaker and inconsistent effects on absolute bets. Similar findings emerged on perceived likelihood of winning and confidence in the bets. Absolute and comparative feedback had equivalent effects on performance attribution and perceived task importance (such that more favorable performance increased ability attribution and task importance), but absolute feedback had much stronger (and more consistent) effects on satisfaction with performance and state self-esteem. These findings suggest that information about one’s absolute standing on a dimension may be more influential than information about comparative standing, supporting Festinger’s (1954) assertion that social comparison was only necessary when objective information was unavailable. Absolute and Comparative Performance Feedback 3 Objective Standards Matter Too Much: The Use and Abuse of Absolute and Comparative Performance Feedback in Absolute and Comparative Judgments and Decisions In 1954, Leon Festinger coined the term “social comparison” and proposed that people compare themselves with others to make sense of their own outcomes, abilities, and opinions. Festinger also argued, however, that comparative social information was not where people looked first to understand what they had, what they accomplished, and who they were. Instead, when objective absolute standards were available, Festinger maintained that the use of those objective standards would obviate the need for comparative social information. Festinger’s theory has been one of the most long-lived and influential psychological theories. However, studies building on Festinger’s work have generally not tested the fundamental assumption that objective absolute information will trump comparative social information when both are available. The Power of Comparative Information Research on social comparison has primarily focused on the effects of different kinds of social comparisons (Mussweiler, 2003; Suls, Martin, & Wheeler, 2002; Suls & Wills, 1991). A great deal of evidence emphasizes the tremendous power of social comparisons, and some of it even suggests that Festinger may have underestimated the degree to which people attend to social comparisons, even when objective absolute information is readily available. For example, Blount and Bazerman (1996) report the results of an experiment in which people were offered $7 for 40 minutes’ work, and knew that others would also be paid $7. Seventy-two percent of their respondents agreed to participate. However, when people were offered $8 but told that other participants would get $10, participation dropped to 54%. People have a fairly good sense of Absolute and Comparative Performance Feedback 4 what a dollar is worth. Nevertheless, a reduction in satisfaction brought about by greater wealth when others are still wealthier has been replicated in studies in the lab (Bazerman, Schroth, Shah, Diekmann, & Tenbrunsel, 1994; Loewenstein, Thompson, & Bazerman, 1989) and in the field (Hagerty, 2000; Luttmer, 2005). The implications of these sorts of findings are profound. If people decide how happy they are by comparing their prosperity with that of others, the result is what Kahneman (1999) has called a hedonic treadmill, in which everyone can grow materially better off without improving subjective well-being (see also Frank, 1985; Myers, 2000). Moreover, research has demonstrated that the power of social comparisons extends well beyond subjective well-being. For example, Klein (1997) manipulated whether participants believed that their performance on an aesthetic judgment task was high or low and above or below average. Participants were then asked to choose between engaging in the same judgment task again – in which they needed to achieve a high absolute score to win a prize – or a chance lottery in which they could also win the prize. Those participants who were told their scores were above average were more likely to choose another trial of the task (over the chance lottery). They appeared to have inferred that if they were better than average, their future scores would be high (in absolute terms). They did this despite the fact that rational use of the comparative feedback they received would dictate they do the opposite: Given uncertainty about how one will do in the future, knowing that one’s score was far above average in the past suggests that if one’s future performance regresses to the mean, it is likely to go down. Subjective evaluations of performance, likewise, were only influenced by comparative feedback. These findings, like the hedonic treadmill, suggest that comparative feedback influences judgments in contexts where it should not, normatively speaking. Absolute and Comparative Performance Feedback 5 Several other studies that did not explicitly manipulate comparative and absolute feedback in a crossed design have obtained conceptually similar results. Many experiments testing the self-evaluation maintenance (SEM) model show that people are more likely to define themselves according to abilities on which they are better than others than for those on which they have high absolute ability (e.g., Campbell, Fairey, & Fehr, 1986; Tesser & Campbell, 1980). Additional work shows that social comparisons (and reactions to comparative feedback) are largely automatic (Gilbert, Giesler, & Morris, 1995; Mussweiler, 2003), suggesting that it is cognitively effortless to apply comparative information to inferences about absolute selfstanding. All these results suggest that comparative information exerts an inappropriately large influence on absolute evaluations. The Power of Absolute Information On the other hand, other research appears to contradict the findings described above. This evidence suggests instead that objective information about one’s own absolute standing exerts too strong an influence on comparative judgments. For example, Moore and Kim (2003) found that people playing a competitive game were more confident that they would win the game if the task was easy than if it was difficult, suggesting they failed to adequately consider others, and instead focused myopically on their own solo performances even when explicitly asked to compare themselves with others (for similar results, see Chambers, Windschitl, & Suls, 2003; Hoelzl & Rustichini, 2005; Kruger & Burrus, 2004; Windschitl, Kruger, & Simms, 2003). This “solo comparison effect” describes the tendency for comparative judgments to be excessively influenced by perceptions of absolute standing. Camerer and Lovallo (1999) argued that budding entrepreneurs underestimate their chances of failure because they focus on their own strengths and abilities, while failing to adequately consider the abilities of their competitors (see Absolute and Comparative Performance Feedback 6 also Greico & Hogarth, 2004; Moore & Cain, 2005). Related work shows that people may infer their relative levels of satisfaction and happiness from their absolute levels (Klar & Giladi, 1999). So what are we to make of Festinger’s belief in the primacy of absolute information? Despite a wealth of research on responses to objective absolute feedback (for a review see Kluger & DeNisi, 1996) and social comparison (for reviews, see Buunk & Gibbons, in press; Suls & Wheeler, 2000), very little research pits absolute and comparative feedback against each other in a way that allows us to compare their influences. Research on the effects of comparative feedback – as in the classic work testing aspects of social comparison theory and its descendant theories (Festinger, 1954; Suls & Wheeler, 2000) – typically does not employ designs that include both comparative and absolute feedback, and especially not both types of feedback in a crossed design. Studies concerned with the effects of absolute feedback are similarly unlikely to also manipulate comparative feedback in the same design. Comparison of effect sizes across studies is impossible due to variation in the dependent measures employed in these studies. Dependent measures in most social comparison studies include psychic variables such as affect (Taylor & Lobel, 1989) and self-evaluations (Tesser, 1988), with much less attention to behavioral measures. Few studies discriminate between behaviors that should be differentially influenced by absolute and comparative feedback. There is no one standard set of dependent measures of either comparative or absolute evaluation; this is a problem because evidence suggests that the effects of comparative and absolute feedback differ substantially on slightly different measures of the same construct (Klein, 2003; Moore, 2005). For example, Klein (1997) found that comparative feedback had a stronger effect on subjective ratings, whereas absolute feedback had a stronger effect on behavioral measures (i.e., Absolute and Comparative Performance Feedback 7 participants’ willingness to bet on their performances). Furthermore, most prior studies show effects of native beliefs about ability on judgments and decisions, rather than assessing the effects of performance feedback. Design and Hypotheses The obvious missing piece of this puzzle is an experiment that manipulates comparative and absolute feedback orthogonally. This paper is designed to fill this void. The inclusion of no-feedback control groups also makes it possible to determine the locus of a given effect. For example, if individuals given favorable comparative feedback behave differently than those given unfavorable feedback, it is difficult to ascertain whether the difference is due to one or both of these groups. No study has crossed relative and absolute feedback in a design that includes conditions where participants include one type of feedback and not the other (or neither type of feedback), so this important question has not been examined. In the study reported here, we gave participants feedback about their performance on a practice test and then asked them to evaluate their performance, place bets on how well they would perform on the actual test, and estimate their likelihood of winning. We informed participants that they earned a low score (20% correct) or a high score (80%) on the practice test, or we gave them no absolute feedback at all, thereby creating a three-level manipulation of absolute feedback. Crossed with this variable, we also informed participants that their practice test score was much better than that of other students (77 percentile), much worse (23 percentile), or we gave them no comparative feedback at all. Thus, there were also three levels of comparative feedback, completing a 3 x 3 factorial design. Importantly, participants placed bets (and rated the likelihood of and confidence in winning those bets) on two different outcomes. The first was an “absolute” outcome, in that the participant had to answer over 50% Absolute and Comparative Performance Feedback 8 of the items correctly on the actual test in order to win. The second was a “comparative” outcome; in this case, participants would win the prize if their score was higher than at least 50% of the other participants. By including equivalent decisions that depended on absolute or comparative ability, it was possible to more directly assess the effects of absolute and comparative feedback on each type of decision. Previous studies that have examined the effects of comparative feedback have often manipulated it by providing participants with feedback about their own absolute performances as well as the absolute performances of others. This sort of manipulation confounds absolute and relative feedback because participants must be given information about their own performance in order for the comparative information to have the intended effect. Instead, our manipulation of comparative feedback varies what participants are told about what percentile rank they fall in, thereby providing them with purely relative information that says nothing about absolute performance. Our first goal is to replicate the “solo comparison effect” observed by Moore and Kim (2003). In other words, we expect that when participants get only absolute feedback, their comparative bets will be higher when the absolute feedback suggests good performance rather than bad performance. Thus, participants would be inappropriately using absolute information to make predictions and decisions that should only be influenced by relative feedback. We also expect to replicate the effects reported by Klein (1997). In particular, when people only have comparative feedback, we expect them to use it when judging their absolute performance (particularly their satisfaction with that performance). In keeping with Klein’s (1997) findings, we expect to find that comparative feedback only influences comparative bets, not absolute bets. Absolute and Comparative Performance Feedback 9 The more interesting question is how each effect is influenced by variations in the other type of feedback and whether the effects of absolute feedback or comparative feedback tend to differ in their magnitude. We can measure the magnitude by contrasting the effect sizes associated with each type of feedback. To look at the differential effects of absolute and comparative feedback, we included a wide range of variables in addition to self-evaluations and decision-making. For example, people exhibit a self-serving bias whereby they attribute successes to internal factors and failures to external factors (Mullen & Riordan, 1988), and according to the self-evaluation maintenance model, people tend to ascribe self-importance to those characteristics on which they have favorable standing (Tesser, 1988). Are they more likely to engage in either of these processes when receiving favorable feedback of one type (absolute or comparative)? The full factorial design of this study allows a direct examination of these questions. Method