In many market environments, for example in investment banking, salesforce management and others, workers and supervisors work closely as a team. Workers are paid a fixed salary and supervisors determine any raises, which are typically dependent on how well the organization does. In such scenarios, a supervisor who constantly offers suggestions can create a problem-typically a worker cannot ignore his supervisor's advice, yet if such advice is wrong and is followed, it will only decrease firm profits. We conduct a laboratory experiment to address a question critical for such settings-does the relationship between advisor and worker interfere with the learning abilities of the worker? The answer is a resounding no. In fact, subjects who have a supervisor advising them and whose advice is costly to ignore actually learn better than those with an advisor whose advice can be ignored. An even more striking result is that advisees as well as advisors in both these conditions learn better than subjects with no advisors. Our result can be attributed to the presence of advice and has direct relevance to learning in many environments.
- Group decision making
ASJC Scopus subject areas
- Economics, Econometrics and Finance (miscellaneous)