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The Dark Side of Competition for Status

  • Charness, Gary
  • Masclet, David
  • Villeval, Marie Claire

Unethical behavior within companies is not rare. We investigate experimentally therole of status-seeking behavior in sabotage and cheating activities aiming at improving one’sperformance ranking in a flat-wage environment. We find that average effort is higher whenindividuals are informed about their relative performance. However, ranking feedback alsofavors disreputable behavior. Some individuals do not hesitate to incur a cost to improve theirrank by sabotaging others’ work or by increasing artificially their own performance. Introducingsabotage opportunities has a strong detrimental effect on performance. Therefore, rankingincentives should be used with care. Inducing group identity discourages sabotage among peersbut increases in-group rivalry.

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Paper provided by Department of Economics, UC Santa Barbara in its series University of California at Santa Barbara, Economics Working Paper Series with number qt1vr4g446.

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Date of creation: 18 Jul 2012
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Handle: RePEc:cdl:ucsbec:qt1vr4g446
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