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Competition and Well-Being

Author

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  • Brandts, Jordi

    (Autonomous University of Barcelona)

  • Riedl, Arno

    (Maastricht University)

  • van Winden, Frans

    (University of Amsterdam)

Abstract

This paper experimentally studies the effects of competition in an environment where people's actions can not be contractually fixed. We find that, in comparison with no competition, the presence of competition does neither increase efficiency nor does it yield any gains in earnings for the short side of the exchange relation. Moreover, competition has a clearly negative impact on the disposition towards others and on the experienced well-being of those on the long side. Since subjective well-being improves only for those on the short side competition contributes to larger inequalities in experienced well-being. All in all competition does not show up as a positive force in our environment.

Suggested Citation

  • Brandts, Jordi & Riedl, Arno & van Winden, Frans, 2005. "Competition and Well-Being," IZA Discussion Papers 1769, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp1769
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    Cited by:

    1. Rode, Julian, 2007. "Truth and Trust in Communication: An Experimental Study of Behavior under Asymmetric Information," Ratio Working Papers 111, The Ratio Institute.
    2. Brandts, Jordi & Fernanda Rivas, María, 2009. "On punishment and well-being," Journal of Economic Behavior & Organization, Elsevier, vol. 72(3), pages 823-834, December.
    3. Juan José Barrios, 2013. "Competition and wellbeing," Documentos de Investigación 95, Universidad ORT Uruguay. Facultad de Administración y Ciencias Sociales.
    4. Rode, Julian, 2008. "Truth and trust in communication : experiments on the effect of a competitive context," Papers 08-04, Sonderforschungsbreich 504.
    5. van Ypersele, Tanguy & Francois, Patrick, 2009. "Doux Commerces: Does Market Competition Cause Trust?," CEPR Discussion Papers 7368, C.E.P.R. Discussion Papers.
    6. Schwieren, Christiane & Weichselbaumer, Doris, 2010. "Does competition enhance performance or cheating? A laboratory experiment," Journal of Economic Psychology, Elsevier, vol. 31(3), pages 241-253, June.
    7. Canegallo, Claudia & Ortona, Guido & Ottone, Stefania & Ponzano, Ferruccio & Scacciati, Francesco, 2008. "Competition versus cooperation: Some experimental evidence," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(1), pages 18-30, February.
    8. Arno Riedl, 2009. "Behavioral and Experimental Economics Can Inform Public Policy: Some Thoughts," CESifo Working Paper Series 2902, CESifo.
    9. Roe, Brian E. & Wu, Steven Y., 2009. "Do the Selfish Mimic Cooperators? Experimental Evidence from Finitely-Repeated Labor Markets," IZA Discussion Papers 4084, Institute of Labor Economics (IZA).
    10. Juan José Barrios, 2014. "Culture, competition, and happiness," Documentos de Investigación 99, Universidad ORT Uruguay. Facultad de Administración y Ciencias Sociales.
    11. Fischer, Justina A.V., 2008. "Is competition good for trust? Cross-country evidence using micro-data," Economics Letters, Elsevier, vol. 100(1), pages 56-59, July.
    12. Rode, Julian, 2010. "Truth and trust in communication: Experiments on the effect of a competitive context," Games and Economic Behavior, Elsevier, vol. 68(1), pages 325-338, January.
    13. Román Andrés Zárate, 2012. "Peer Effects, Cooperation and Competition in Human Capital Formation," Documentos CEDE 9795, Universidad de los Andes, Facultad de Economía, CEDE.
    14. Juan Barrios, 2015. "“I Think Competition is Better Than You Do: Does It Make Me Happier?” Evidence from the World Value Surveys," Journal of Happiness Studies, Springer, vol. 16(3), pages 599-618, June.
    15. Brian Roe & Steven Y. Wu, 2005. "Social Preferences and Relational Contracting Performance: An Experimental Investigation," Microeconomics 0509006, University Library of Munich, Germany.

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    More about this item

    Keywords

    happiness; well-being; laboratory experiment; emotions; market interaction; competition;
    All these keywords.

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D30 - Microeconomics - - Distribution - - - General
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • M50 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - General

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