Effort, Spillover and Grades - an Experimental Design Using Peer Review

Does the perceived performance of those around us affect our individual effort in the classroom? A game theoretical model is formalized to explain the factors that influence the choice to display effort in the classroom. It is shown that if there are incentives to participate, it is a dominant strategy for an academically weaker student to participate; however for a stronger student, his choice depends on his rate of time preference and the quality of effort he perceives of his contribution. This paper also empirically examines this hypothesis using an experiment. An experimental test design is used on two 3rd year Economics classes from the National University of Singapore to examine the role of effort and 'peer group' effects over six periods. Students ranked each other through individual and group peer reviews after each class period. Information about on-going performance through peer review was revealed in only one class the following week and withheld in the other class. The results show that weekly information about performance can influence effort in the classroom by introducing a 'social respect' element to reward or penalize students who display effort or refuse to give effort respectively, thereby raising students' weightage of present payoffs. In this way, effort over the semester then becomes highly correlated with overall grade. Spillover effects were only experienced by the sample given weekly information