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Selection, Tournaments, and Dishonesty

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  • Marco Faravelli
  • Lana Friesen
  • Lata Gangadharan

Abstract

We conduct a real effort experiment in which performance is not monitored and participants are paid according to their reported performance. Participants are paid according to a piece rate and a winner-take-all tournament and then select between the two schemes before performing the task one more time. Competition increases dishonesty and lowers output when the payment scheme is exogenously determined. Participants with a higher propensity to be dishonest are more likely to select into competition. However after selection, we find no output difference between piece rate and tournament. This is attributable to a handful of honest individuals who select competition.

Suggested Citation

  • Marco Faravelli & Lana Friesen & Lata Gangadharan, 2014. "Selection, Tournaments, and Dishonesty," Monash Economics Working Papers 08-14, Monash University, Department of Economics.
    • Handle: RePEc:mos:moswps:2014-08
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    More about this item

    Keywords

    Dishonesty; Selection; Tournament; Piece rate; Real effort experiment;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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