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Do High Stakes and Competition Undermine Fairness? Evidence from Russia


Fehr, Ernst; Fischbacher, Urs; Tougareva, Elena (2002). Do High Stakes and Competition Undermine Fairness? Evidence from Russia. Working paper series / Institute for Empirical Research in Economics No. 120, University of Zurich.

Abstract

This paper reports the results of a series of competitive labour market experiments in which subjects have the possibility to reciprocate favours. In the high stake condition subjects earned between two and three times their monthly income during the experiment. In the normal stake condition the stake level was reduced by a factor of ten. We observe that both in the high and the normal stake condition fairness concerns are strong enough to outweigh competitive forces and give rise to non-competitive wages. There is also no evidence that effort behaviour becomes generally more selfish at higher stake levels. Therefore, our results suggest that, contrary to common beliefs, fairness concerns may play an important role even at relatively high stake levels.

Abstract

This paper reports the results of a series of competitive labour market experiments in which subjects have the possibility to reciprocate favours. In the high stake condition subjects earned between two and three times their monthly income during the experiment. In the normal stake condition the stake level was reduced by a factor of ten. We observe that both in the high and the normal stake condition fairness concerns are strong enough to outweigh competitive forces and give rise to non-competitive wages. There is also no evidence that effort behaviour becomes generally more selfish at higher stake levels. Therefore, our results suggest that, contrary to common beliefs, fairness concerns may play an important role even at relatively high stake levels.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Institute for Empirical Research in Economics (former)
Dewey Decimal Classification:330 Economics
Language:English
Date:July 2002
Deposited On:29 Nov 2011 21:26
Last Modified:21 Nov 2017 15:35
Series Name:Working paper series / Institute for Empirical Research in Economics
ISSN:1424-0459
Official URL:http://www.econ.uzh.ch/wp.html

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