Avatars as Peers at Work: An Experimental Study in Virtual Reality

Identification of peer effects is often complicated by the reflection problem: Does agent i influence agent j, or vice versa? To be able to identify a clear causality, we embed a virtual human (avatar) as co-worker of a human subject into an immersive virtual environment. We observe that low productive human subjects increase their work performance more when they observe a low productive avatar – compared to a high productive avatar. This result is in line with the predictions of the social comparison theory, in as much as we observe stronger peer effects when the perceived similarity in abilities between the peers is high.