Scandinavian Working Papers in Economics

LiU Working Papers in Economics,
Linköping University, Division of Economics, Department of Management and Engineering

No 5: How Does Dishonesty Affect Winning and the Willingness to Compete? Evidence from a Stiff Competition Environment

Kinga Posadzy (), Camilla Josephson () and Peter Martinsson ()
Additional contact information
Kinga Posadzy: Division of Economics, Department of Management and Engineering, Linköping University, Postal: Linköping University, SE-581 83 Linköping, Sweden
Camilla Josephson: Division of Economics, Department of Management and Engineering, Linköping University, Postal: Linköping University, SE-581 83 Linköping, Sweden
Peter Martinsson: Division of Economics, Department of Management and Engineering, Linköping University, Postal: Linköping University, SE-581 83 Linköping, Sweden

Abstract: We experimentally investigate how the possibility of behaving dishonestly affects the willingness to compete and who the winner is when there is stiff competition. Our results show that although only some subjects are dishonest when competing, dishonest behaviour creates significant inefficiencies due to best performing subjects not winning. Willingness to compete, on the other hand, was unaffected.

Keywords: Competition; dishonesty; experiment

JEL-codes: C91; D03; D04

11 pages, January 1, 2017

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