The Effects of Real-Time Feedback on Effort and Performance
New digital technologies allow companies to provide managers with real-time feedback to facilitate decision-making. We use a natural quasi-experiment in the setting of professional soccer referees to study the causal effect of the availability of a real-time feedback system on effort and decision quality. We find that experienced referees decrease their effort in response to real-time feedback without harming the quality of their initial decision-making. This results in overall better final decisions after potential corrective feedback. In contrast, less experienced referees increase their effort but make worse initial decisions. While this increased number of mistakes is compensated by the possibility to correct decisions upon feedback, we find no evidence that inexperienced referees overall benefit from real-time feedback with respect to quality of final decisions made. Furthermore, we find that under the real-time feedback system game outcomes are more in line with outcomes expected ex ante based on relative team strengths for games officiated by experienced referees and games after an initial adjustment phase. Our results extend the literature on technology-based decision-aids and their effects on decision-making quality and behavior.