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Competitiveness of Entrepreneurs and Salaried Workers

Author

Listed:
  • Loukas Balafoutas

    (University of Exeter, Exeter EX4 4PY, United Kingdom; University of Innsbruck, 6020 Innsbruck, Austria)

  • Mongoljin Batsaikhan

    (Middlesex University, London NW4 4BT, United Kingdom)

  • Matthias Sutter

    (University of Innsbruck, 6020 Innsbruck, Austria; Max Planck Institute for Research on Collective Goods, 53113 Bonn, Germany; University of Cologne, 50923 Cologne, Germany; Institute of Labor Economics, 53113 Bonn, Germany)

Abstract

We measure the willingness to compete of entrepreneurs and salaried workers in an experiment. Participants can choose between a piece rate and a tournament scheme in either private or public. We find that in the private condition, entrepreneurs are less competitive than salaried workers, but in the public condition, this ordering is reversed. Survey data suggest that perceived norms of appropriate behavior, along with beliefs about the instrumental value of competitiveness for professional success, can explain why entrepreneurs are more competitive when decisions are publicly observable. We also find that the latter condition improves the quality of experimental decisions.

Suggested Citation

  • Loukas Balafoutas & Mongoljin Batsaikhan & Matthias Sutter, 2024. "Competitiveness of Entrepreneurs and Salaried Workers," Management Science, INFORMS, vol. 70(5), pages 2900-2911, May.
    • Handle: RePEc:inm:ormnsc:v:70:y:2024:i:5:p:2900-2911
    DOI: 10.1287/mnsc.2023.4838
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    More about this item

    Keywords

    competitiveness; entrepreneurs; salaried workers; profits; field behavior; experiment;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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