The Performance Effect of the Information Ban: Evidence from a Natural Experiment

We analyze the effect of information ban on performance in a highly pressured and competitive environment. An open question in management control is the extent to which the ban of information and feedback provided to employees affect their performance. Two competing arguments arise: (i) the information overload effect and (ii) the decision-facilitating role. We use a natural experiment generated by the radio communication prohibition in the Formula One setting. We find that the reduction in the amount and type of information increases drivers' performance, even though the reduction of technical and strategic information should lead to a decrease in decision quality. This is particularly true for best performers. Our results suggest that the effect decreases in the last races of the season, when pressure to achieve objectives is stronger. We discuss the implications of this for organizations.