Author(s): Veronika DolarThe purpose of this paper is to study the effect of receiving instant feedback on online homework assignments. Using data from a natural experiment that included over 500 students taking Principles of Micro- and Macroeconomics an a midsize public university in Ohio, I show that “Grade It Now” (GIN) option in Aplia -an online learning management system positively impacts grades on assignments. This impact is especially strong for academically weaker students and has the same impact on students’ grade as does increasing GPA by almost half a point. However, in sections with GIN, students’ performance on midterm exams and final exam was either not statistically different from sections with Grade At Deadline (GAD) option or was actually worse. Using OLS regression and controlling for various student and class characteristics, I show that Aplia’s GIN impact on students’ performance on exams is negative and does not improve student learning. One possible explanation for this might be due to students’ trying to “game” the system by increasing their grades on assignments and lowering their efforts on exams. This behavior seems to be supported with the data since there is no difference in the final grade between sections using GIN vs. GAD.