IDEAS home Printed from https://ideas.repec.org/p/uea/wcbess/17-03.html
   My bibliography  Save this paper

The productivity puzzle and the problem with the rich: An experiment on competition, inequality and "team spirit"

Author

Listed:
  • Shaun P. Hargeaves Heap

    (King's College London)

  • Abhijit Ramalingam

    (University of East Anglia)

  • Brock V. Stoddard

    (University of South Dakota)

Abstract

This paper examines with an experiment a new way that inequality and competition may interact to affect productivity: through team public goods contributions. While inequality within a team diminishes team cooperation in the absence of competition, we find there is no effect of inequality when teams compete. Competition boosts cooperation and more so in unequal teams. Thus, a decline in competition accompanied by growing inequality has a doubly adverse effect on productivity. The difference in the effect of inequality is driven by the behaviour of the 'rich'. They disengage from their teams but recover their 'team spirit' under competition.

Suggested Citation

  • Shaun P. Hargeaves Heap & Abhijit Ramalingam & Brock V. Stoddard, 2017. "The productivity puzzle and the problem with the rich: An experiment on competition, inequality and "team spirit"," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 17-03, School of Economics, University of East Anglia, Norwich, UK..
    • Handle: RePEc:uea:wcbess:17-03
    as

    Download full text from publisher

    File URL: https://ueaeco.github.io/working-papers/papers/cbess/UEA-CBESS-17-03.pdf
    File Function: main text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hargreaves Heap, Shaun P. & Ramalingam, Abhijit & Stoddard, Brock V., 2016. "Endowment inequality in public goods games: A re-examination," Economics Letters, Elsevier, vol. 146(C), pages 4-7.
    2. Junichiro Ishida, 2006. "Team Incentives under Relative Performance Evaluation," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 15(1), pages 187-206, March.
    3. Martin Sefton & Robert Shupp & James M. Walker, 2007. "The Effect Of Rewards And Sanctions In Provision Of Public Goods," Economic Inquiry, Western Economic Association International, vol. 45(4), pages 671-690, October.
    4. Sheremeta, Roman M., 2010. "Experimental comparison of multi-stage and one-stage contests," Games and Economic Behavior, Elsevier, vol. 68(2), pages 731-747, March.
    5. Nalbantian, Haig R & Schotter, Andrew, 1997. "Productivity under Group Incentives: An Experimental Study," American Economic Review, American Economic Association, vol. 87(3), pages 314-341, June.
    6. Emmanuel Dechenaux & Dan Kovenock & Roman Sheremeta, 2015. "A survey of experimental research on contests, all-pay auctions and tournaments," Experimental Economics, Springer;Economic Science Association, vol. 18(4), pages 609-669, December.
    7. Anthony M. Marino & Ján Zábojník, 2004. "Internal Competition for Corporate Resources and Incentives in Teams," RAND Journal of Economics, The RAND Corporation, vol. 35(4), pages 710-727, Winter.
    8. Reuben, Ernesto & Riedl, Arno, 2013. "Enforcement of contribution norms in public good games with heterogeneous populations," Games and Economic Behavior, Elsevier, vol. 77(1), pages 122-137.
    9. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    10. Simon Gachter & Ernst Fehr, 2000. "Cooperation and Punishment in Public Goods Experiments," American Economic Review, American Economic Association, vol. 90(4), pages 980-994, September.
    11. Hargreaves Heap, Shaun P. & Ramalingam, Abhijit & Ramalingam, Siddharth & Stoddard, Brock V., 2015. "‘Doggedness’ or ‘disengagement’? An experiment on the effect of inequality in endowment on behaviour in team competitions," Journal of Economic Behavior & Organization, Elsevier, vol. 120(C), pages 80-93.
    12. Gunnthorsdottir, Anna & Rapoport, Amnon, 2006. "Embedding social dilemmas in intergroup competition reduces free-riding," Organizational Behavior and Human Decision Processes, Elsevier, vol. 101(2), pages 184-199, November.
    13. Tan, Jonathan H.W. & Bolle, Friedel, 2007. "Team competition and the public goods game," Economics Letters, Elsevier, vol. 96(1), pages 133-139, July.
    14. Sean P. Hargreaves Heap & Abhijit Ramalingam & Siddharth Ramalingam & Brock V. Stoddard, 2015. "‘Doggedness’ or ‘disengagement’? An experiment on the effect of inequality in endowment on behaviour in team competitions," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 13-08-R, School of Economics, University of East Anglia, Norwich, UK..
    15. Yan Chen & Sherry Xin Li, 2009. "Group Identity and Social Preferences," American Economic Review, American Economic Association, vol. 99(1), pages 431-457, March.
    16. Buckley, Edward & Croson, Rachel, 2006. "Income and wealth heterogeneity in the voluntary provision of linear public goods," Journal of Public Economics, Elsevier, vol. 90(4-5), pages 935-955, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Shaun P. Hargreaves Heap & Abhijit Ramalingam & Brock K. Stoddard, 2018. "Within-group inequality in inter-group competition," Working Papers 18-17, Department of Economics, Appalachian State University.
    2. Hargreaves Heap, Shaun P. & Ramalingam, Abhijit & Ramalingam, Siddharth & Stoddard, Brock V., 2015. "‘Doggedness’ or ‘disengagement’? An experiment on the effect of inequality in endowment on behaviour in team competitions," Journal of Economic Behavior & Organization, Elsevier, vol. 120(C), pages 80-93.
    3. Sean P. Hargreaves Heap & Abhijit Ramalingam & Siddharth Ramalingam & Brock V. Stoddard, 2015. "‘Doggedness’ or ‘disengagement’? An experiment on the effect of inequality in endowment on behaviour in team competitions," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 13-08-R, School of Economics, University of East Anglia, Norwich, UK..
    4. Heap, Shaun P. Hargreaves & Ramalingam, Abhijit & Stoddard, Brock V., 2021. "Team competition when there is within-team inequality," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 90(C).
    5. Abhijit Ramalingam & Brock V. Stoddard & James M. Walker, 2020. "Naturally occurring enhancements to competition for talent in teams," Working Papers 21-02, Department of Economics, Appalachian State University.
    6. Roman M. Sheremeta, 2018. "Behavior In Group Contests: A Review Of Experimental Research," Journal of Economic Surveys, Wiley Blackwell, vol. 32(3), pages 683-704, July.
    7. Francesco Fallucchi & Enrique Fatas & Felix Kölle & Ori Weisel, 2021. "Not all group members are created equal: heterogeneous abilities in inter-group contests," Experimental Economics, Springer;Economic Science Association, vol. 24(2), pages 669-697, June.
    8. repec:uea:wcbess:13-08 is not listed on IDEAS
    9. Abhijit Ramalingam & Brock V. Stoddard & James M. Walker, 2021. "Naturally occurring enhancements to competition for talent in teams​," GRU Working Paper Series GRU_2021_021, City University of Hong Kong, Department of Economics and Finance, Global Research Unit.
    10. Florian Heine & Martin Sefton, 2018. "To Tender or Not to Tender? Deliberate and Exogenous Sunk Costs in a Public Good Game," Games, MDPI, vol. 9(3), pages 1-28, June.
    11. Ramalingam, Abhijit & Stoddard, Brock V. & Walker, James M., 2019. "The market for talent: Competition for resources and self-governance in teams," Games and Economic Behavior, Elsevier, vol. 114(C), pages 268-284.
    12. Francisca Jiménez-Jiménez, 2023. "Heterogeneity, coordination and competition: the distribution of individual preferences in organisations," Economics of Governance, Springer, vol. 24(1), pages 67-107, March.
    13. Fallucchi, Francesco & Ramalingam, Abhijit & Rockenbach, Bettina & Waligora, Marcin, 2021. "Inequality and competitive effort: The roles of asymmetric resources, opportunity and outcomes," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 81-96.
    14. Huang, Lingbo & Murad, Zahra, 2021. "Fighting alone versus fighting for a team: An experiment on multiple pairwise contests," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 616-631.
    15. Chen, Yi-Yi, 2020. "Intergroup competition with an endogenously determined prize level," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 759-776.
    16. Bhattacharya, Puja, 2016. "Inter-team contests with power differential," Journal of Economic Behavior & Organization, Elsevier, vol. 132(PA), pages 157-175.
    17. De Geest, Lawrence R. & Kingsley, David C., 2021. "Norm enforcement with incomplete information," Journal of Economic Behavior & Organization, Elsevier, vol. 189(C), pages 403-430.
    18. R. Mark Isaac & Douglas A. Norton & Svetlana Pevnitskaya, 2019. "A new experimental mechanism to investigate polarized demands for public goods: the effects of censoring," Experimental Economics, Springer;Economic Science Association, vol. 22(3), pages 585-609, September.
    19. Roman Sheremeta, 2018. "Experimental Research on Contests," Working Papers 18-07, Chapman University, Economic Science Institute.
    20. Alexandra Baier & Loukas Balafoutas & Tarek Jaber-Lopez, 2023. "Ostracism and theft in heterogeneous groups," Experimental Economics, Springer;Economic Science Association, vol. 26(1), pages 193-222, March.
    21. Gangadharan, Lata & Nikiforakis, Nikos & Villeval, Marie Claire, 2017. "Normative conflict and the limits of self-governance in heterogeneous populations," European Economic Review, Elsevier, vol. 100(C), pages 143-156.

    More about this item

    Keywords

    public goods; experiment; team competition; inequality; endowment; within-group;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:uea:wcbess:17-03. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Cara Liggins (email available below). General contact details of provider: https://edirc.repec.org/data/esueauk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.