Peer Effects of Ambition

Anything you can do, I can do better: New research shows we aim higher when we observe our peers being ambitious. In the first ever laboratory experiment to investigate the peer effects of ambition, WZB researchers reveal how we adjust our own goals to match those of our peers, with important implications for educational outcomes and social mobility. The effects are greatest when achievement can be measured in a concrete, easily observable way, for example in school grades or earnings.

Published as a WZB Discussion Paper, the study by Philipp Albert, Dorothea Kübler, and Juliana Silva-Goncalves looked at how the social environment and the visibility of peers’ actions affected participants’ decision to set personal targets and self-select into tasks of varying degrees of difficulty. The researchers sought to address a gap in scholarship on the peer effects of ambition, which, although often cited as a key factor in social mobility, have until now never been investigated in a laboratory setting. Participants counted the number of colored squares in a grid, earning points for correct answers and for reaching goals they set themselves, which some could change in response to learning the average targets set by other participants. On average, participants earned 25% more points (which were converted into Euros) when they set more ambitious goals in response to observing their peers’ choices: More proof that it pays to be ambitious.

Yet the same effect was not found when participants were given the opportunity to tackle more difficult tasks. Even when their peers took on a more challenging grid, the majority stuck to their initial choice. The researchers interpreted this finding as proof that the peer effects of ambition are reduced where the outcome of decisions is uncertain. In short, we are more likely to reach for the stars in response to our peers aiming high when we can easily measure results – focusing on pay grade, for example, rather than more complex matters such as career choice.

The study also unearthed gender differences: Women tended to set less ambitious performance goals than men. However, both women and men took on tasks of similar levels of difficulty. Higher ability participants also set themselves more ambitious targets and chose to complete more challenging tasks. This finding in particular has profound implications for the future of streaming at school: Sorting children according to their perceived academic potential early on can reinforce differences in their performance goals.

The entire discussion paper is available to download here.

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About the Authors

Philipp Albert is a research fellow at the WZB’s Economics of Change research unit.

Dorothea Kübler is the director of the department of Market Behavior at the WZB and a professor of Economics at the Technical University of Berlin.

Juliana Silva-Goncalves was an A.SK fellow from 2015-16 and a WZB research fellow from 2017-18. She is now a research fellow at the University of Sydney.