The Role of Monetary Incentives and Feedback on How Well Students Calibrate Their Academic Performance

ABSTRACT Students' accurate monitoring of their own performance is essential for achieving successful learning processes. In this work, we have aimed at analysing the role played by monetary incentives and by metacognitive feedback in improving students' miscalibration of their academic performance. A randomised field experiment was implemented in which undergraduate students enrolled in an intermediate Microeconomics course were offered the possibility to estimate their academic performance in that course. Global judgements were elicited immediately before (prediction) and immediately after (postdiction) answering each of three multiple choice exam‐tests that students covered along the semester. The predictive (postdictive) bias in each test was calculated as the difference between the grade predicted (postdicted) by the student and her actual grade. The experiment has allowed for analysis of sole or joint effects of monetary incentives and metacognitive feedback interventions in calibration accuracy. Predictive as well as postdictive biases have shown to be independent of the treatment variables. Moreover, support has turned up for the Dunning‐Kruger effect, in the sense that students' academic record appeared as a positive significant predictor of judgements' accuracy of their own performance. Additional potential covariates like students' cognitive ability, risk attitudes, and personality traits have been found to be non‐significant predictors of students' miscalibration. In terms of educational policy, our findings suggest that instructors should carefully weigh up the financial costs of monetarily incentivising students to improve the accuracy of their performance predictions, particularly when such intervention—whether implemented alone or in combination with metacognitive feedback—may not lead to significant improvements in metacognitive accuracy.