- Applied microeconomic theory
- Organizational economics
- Industrial organization
Feedback on Ideas (joint with Zeinab Aboutalebi)
Employees are often assigned tasks comprising two distinct phases: in the first phase, ideas are generated; in the second phase, the best idea is implemented. Furthermore, it is common for supervisors to give feedback to their employees in this process. This paper studies the supervisor’s problem. Supervisors face the following tradeoff: while honest feedback encourages employees to discard bad ideas, it can also be demotivating. We obtain three main results. First, the supervisor only gives honest feedback to high self-opinion agents. Second, receiving honest feedback leads high self-opinion agents to exert more effort. Third, overconfidence is potentially welfare improving.