DISCUSSION

We develop a model of goal setting to help understand our findings. We start with a baseline
model in which either type of goal can help students to mitigate their self-control problem. At
period one the ‘student-planner’ sets a goal for her future self, at period two the ‘student-actor’
chooses how hard to work, and at period three performance in the course is realized. The student
is present biased, and so in the absence of a goal the student exhibits a self-control problem
due to time inconsistency: when the time comes to work the student-actor works less hard than
the student-planner would like. By acting as salient reference points, the theory suggests that
self-set goals can serve as an internal commitment device that helps students who anticipate
their self-control problem to steer their effort toward its optimal level.
We then use this model to explain why task-based goals can be more effective than performancebased
goals. This finding emerges naturally if we relax either of two strong assumptions made in
the baseline model, namely that students understand perfectly the relationship between effort
and performance and that this relationship involves no uncertainty. First, if practice exams are
more productive than those tasks that an overconfident student would select for herself, then
task-based goals will be more effective than performance-based goals. 4 Second, a stochastic
relationship between effort and performance (‘performance uncertainty’) makes performancebased
goals risky: when performance turns out to be low the student fails to achieve her goal.
Anticipating this possibility, the student scales back the performance-based goal that she sets
for her future self, which decreases the effectiveness of goal-setting. In contrast, these effects
of performance uncertainty are not present in the case of task-based goals because the student
directly controls the number of practice exams that she completes and so can guarantee that
she achieves her task-based goal.
Our paper makes two contributions to the literature. The main contribution is to use experiments
to provide causal estimates of the impact of self-set goals on the effort and performance
of college students. These estimates suggest that self-set performance goals are ineffective while
self-set task-based goals help college students to overcome their self-control problem. Our finding
that performance-based goals are ineffective stands in stark contrast to a literature in educational
psychology that uses non-causal correlations to suggest that performance-based goals can
motivate college students (see, e.g., Zimmerman and Bandura, 1994, Harackiewicz et al., 1997,
Elliot and McGregor, 2001, Barron and Harackiewicz, 2003, Linnenbrink-Garcia et al., 2008 and
Darnon et al., 2009). 5 A handful of papers in psychology use experiments to study the effects
of self-set goals on the behavior of college students (Morgan, 1987; Latham and Brown, 2006;
Morisano et al., 2010; Chase et al., 2013); however, in contrast to our analysis, these studies
rely on small samples, do not study the impact of performance-based goals on performance or
4 Our overconfidence explanation implies that students have incorrect beliefs about the best way to increase
their academic achievement. This is consistent with the explanation given by Allan and Fryer (2011) for why
performance-based financial incentives appear less effective than task-based financial incentives.
5 Relying on correlations based on non-experimental variation in our sample, rather than on the causal effects
estimated solely from variation induced by our experimental interventions, would give a misleading impression
of the effectiveness of performance-based goals. This is because we reproduce the correlational finding from the
educational psychology literature that college students who set ambitious performance-based goals perform better.
Specifically, conditional on student characteristics, the correlation in our sample between course performance
(measured by total number of points scored out of one hundred) and the level of the goal is 0.203 (p = 0.000) for
students who set performance-based goals. For students who set task-based goals the corresponding correlation
is 0.391 (p = 0.000), which is also in line with correlational findings from educational psychology (see, e.g., Elliot
and McGregor, 2001, Church et al., 2001, and Hsieh et al., 2007).
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