The Effect of Perceived Advantage and Disadvantage on Performance: The Role of External Efficacy

This experiment examined how perceptions of advantage and disadvantage determine performance in a competitive context. We distinguished between internal and external efficacy, and manipulated external efficacy by inducing perceptions of advantaged or disadvantaged starting positions in a competition, keeping the actual positions equal. The treatment increased the performance of the advantaged party and decreased the performance of the disadvantaged party. In addition, measured external and internal efficacy had qualitatively different effects on performance. The results are explained by the idea that losses loom larger than gains.