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Competitiveness of Entrepreneurs and Salaried Workers

Author

Listed:
  • Loukas Balafoutas

    (University of Innsbruck)

  • Mongoljin Batsaikhan

    (Georgetown University in Qatar)

  • Matthias Sutter

    (Max Planck Institute for Research on Collective Goods Bonn, University of Cologne, University of Innsbruck, and IZA Bonn)

Abstract

We measure the willingness to compete of entrepreneurs and salaried workers in an experiment. We let participants choose between a piece-rate and a tournament scheme either in private or in public. We find that in the private condition entrepreneurs are less competitive than salaried workers, but that in the public condition this ordering is reversed. Data from a follow-up survey suggest that social image concerns of entrepreneurs and perceived norms can explain why entrepreneurs are more competitive when decisions are publicly observable. Our survey also reveals that more competitive entrepreneurs earn higher profits in their businesses.

Suggested Citation

  • Loukas Balafoutas & Mongoljin Batsaikhan & Matthias Sutter, 2021. "Competitiveness of Entrepreneurs and Salaried Workers," ECONtribute Discussion Papers Series 069, University of Bonn and University of Cologne, Germany.
    • Handle: RePEc:ajk:ajkdps:069
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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