Lying in competitive environments: Identifying behavioral impacts

Incentive schemes based on relative performance provide high effort incentives, but may backfire by increasing incentives for misconduct. Previous literature supports this view by demonstrating that, as compared to individual incentive schemes based on absolute performance only, highly competitive environments are associated with higher degrees of lying and cheating. However, it is not clear if this is (mainly) driven by stronger financial incentives or by competition per se and its behavioral effects. We conduct an online experiment with competitive and individual incentive schemes in which the financial incentives to lie are held constant. From a behavioral perspective, a competitive environment may increase the willingness for misconduct via a desire-to-win, but may also decrease it via the negative payoff externality on competitors. Our results provide evidence of a significant lying-enhancing desire-to-win-effect and an insignificant lying-reducing negative externality effect.

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Publication Details

Journal
European Economic Review
Published
2024-08-26
DOI
https://doi.org/10.1016/j.euroecorev.2024.104844
Citations
3
Primary Topic
Experimental Behavioral Economics Studies
Type
article
Field-Weighted Citation Impact
1.58

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article

Lying in competitive environments: Identifying behavioral impacts

Eberhard Feess, Simon Dato, Petra Nieken
3 citations
European Economic Review
Experimental Behavioral Economics Studies
1.58
article

Lying in competitive environments: Identifying behavioral impacts

Eberhard Feess, Simon Dato, Petra Nieken
article en
3 citations

Abstract

Incentive schemes based on relative performance provide high effort incentives, but may backfire by increasing incentives for misconduct. Previous literature supports this view by demonstrating that, as compared to individual incentive schemes based on absolute performance only, highly competitive environments are associated with higher degrees of lying and cheating. However, it is not clear if this is (mainly) driven by stronger financial incentives or by competition per se and its behavioral effects. We conduct an online experiment with competitive and individual incentive schemes in which the financial incentives to lie are held constant. From a behavioral perspective, a competitive environment may increase the willingness for misconduct via a desire-to-win, but may also decrease it via the negative payoff externality on competitors. Our results provide evidence of a significant lying-enhancing desire-to-win-effect and an insignificant lying-reducing negative externality effect.

European Economic ReviewVol. 170
Karlsruhe Institute of Technology (DE), Victoria University of Wellington (NZ), EBS University of Business and Law (DE)
Deutsche Forschungsgemeinschaft, Ministerium für Wissenschaft, Forschung und Kunst Baden-Württemberg
Openalex Percentile: Top 14%
Experimental Behavioral Economics Studies
1.58
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