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Competition Between Organizational Groups: Its Impact on Altruistic and Antisocial Motivations

  • Lorenz Goette

    ()

    (Department of Economics, University of Lausanne, Internef, 1015 Lausanne-Dorigny, Switzerland)

  • David Huffman

    ()

    (Department of Economics, Swarthmore College, Swarthmore, Pennsylvania 19081)

  • Stephan Meier

    ()

    (Graduate School of Business, Columbia University, New York, New York 10027)

  • Matthias Sutter

    ()

    (Department of Public Finance, University of Innsbruck, A-6020 Innsbruck, Austria; and Department of Economics, University of Gothenburg, 40530 Gothenburg, Sweden)

Firms are often organized into groups. Group membership has been shown empirically to have positive effects, in the form of increased prosocial behavior toward in-group members. This includes an enhanced willingness to engage in altruistic punishment of inefficient defection. Our paper provides evidence of a dark side of group membership. In the presence of cues of competition between groups, a taste for harming the out-group emerges: punishment ceases to serve a norm enforcement function, and instead, out-group members are punished harder and regardless of whether they cooperate or defect. Our results point to a mechanism that might help explain previous mixed results on the social value of punishment, and they contribute to understanding the sources of conflict between groups. They also point to an important trade-off for firms: introducing competition enhances within-group efficiency but also generates costly between-group conflict. This paper was accepted by Teck Ho, decision analysis.

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File URL: http://dx.doi.org/10.1287/mnsc.1110.1466
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Article provided by INFORMS in its journal Management Science.

Volume (Year): 58 (2012)
Issue (Month): 5 (May)
Pages: 948-960

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Handle: RePEc:inm:ormnsc:v:58:y:2012:i:5:p:948-960
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