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Selection, Tournaments, and Dishonesty

  • Marco Faravelli
  • Lana Friesen
  • Lata Gangadharan

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.

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Paper provided by Monash University, Department of Economics in its series Monash Economics Working Papers with number 08-14.

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Length: 42 pages
Date of creation: Apr 2014
Date of revision:
Handle: RePEc:mos:moswps:2014-08
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Department of Economics, Monash University, Victoria 3800, Australia

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