The Effect of Rankings on Judgment and Behaviour

Abstract

Rankings reveal important information about relative performance in competitive settings. Despite their widespread use, relatively little about their psychological impact on individuals’ decisions and behaviours is known. Such a limited understanding of both the beneficial and detrimental effects of rankings may lead to undesirable and unintended consequences. In this thesis I try to fill that gap by investigating how rankings can affect our judgment in four main areas. First, I explore the effect of rankings on the perceived potential of performance improvement and how this influences individuals’ aspiration levels. I also identify a factor that moderates this effect. Second, I examine the role of rankings in a competition between two commensurate rivals by exploring the relationship between rankings and predicted winning probabilities, and how this judgment is shaped by competitors’ inferences about relative capabilities. Third, I explore the role of rankings on pay requests, and show how this effect is mediated by personal entitlement and moderated by the pay level of similarly ranked others. Finally, I show how rankings influence the decision to cooperate with similarly-ranked rivals under gain and loss situations. The results suggest that the judgments and decisions of high-ranking individuals vary markedly from those of low-ranking individuals. Specifically, high-ranking individuals – in contrast to lower-ranked individuals – tend to set lower aspiration levels, predict lower winning probabilities when competing with commensurate rivals, demand higher pay, and are more sensitive about their cooperation decisions when the situational contexts change. I end with a general discussion of the findings, their theoretical and managerial implications, and suggestions for future research.