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Everyone is a Winner: Promoting Cooperation through All-Can-Win Intergroup Competition

  • Reuben, Ernesto

    ()

    (Columbia University)

  • Tyran, Jean-Robert

    ()

    (University of Copenhagen)

We test if cooperation is promoted by rank-order competition between groups in which all groups can be ranked first, i.e. when everyone can be a winner. This type of rank-order competition has the advantage that it can eliminate the negative externality a group's performance imposes on other groups. However, it has the disadvantage that incentives to outperform others are absent if groups perform at the same level and it therefore does not eliminate low-cooperation equilibria. We find that all-can-win competition produces a universal increase in cooperation and benefits a majority of individuals if incentives to compete are strong.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4112.

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Length: 29 pages
Date of creation: Apr 2009
Date of revision:
Publication status: published in: European Journal of Political Economy, 2010, 26 (1), 25-35
Handle: RePEc:iza:izadps:dp4112
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