Information, goal setting and performance: Experimental evidence

Abstract

We investigate how information about relative performance shapes goal setting and subsequent performance. Combining a field experiment in a university course with a complementary laboratory experiment, we exogenously vary whether individuals receive baseline relative-performance feedback before or after setting non-binding goals. We document that uninformed individuals anchor goals primarily on subjective, often inaccurate beliefs. Providing information systematically corrects these distortions: individuals who underestimate their relative ability revise their goals upward, whereas overestimators adjust their targets downward. However, the effect of information on performance is limited – it only improves performance for underestimators in the field experiment. To explore the underlying mechanism, we leverage laboratory evidence to examine voluntary goal resetting. We find that delayed feedback affects final goals only when individuals reset them. Accordingly, treatment differences in final goals are substantially attenuated for underestimators but remain sizable for overestimators. Once this goal-adjustment process is accounted for, upward revisions among underestimators improve performance, whereas downward revisions among overestimators reduce challenge and impair ultimate performance.