HONG KONG SAR – Media Outreach – April 14, 2022 – Inspired by the rise of a highly competitive work ethic in modern China, a group of researchers chose to examine the effectiveness of competition as a motivational tool, particularly with regard to ability. people who are motivated to compete and cooperate in achieving the organization’s goals. Their results suggest that the more competitive people become, the less willing they are to cooperate with others.

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The study The Cooperative Consequences of Contests was co-authored by Jaimie Lien, assistant professor of business economics in the Department of Decision Science and Managerial Economics at the Business School of the Chinese University of Hong Kong ( CUHK), Professor Jie Zheng of Tsinghua University and PhD student Yilin Zhuo at the University of California, Los Angeles.

Neijuan (roughly translates to involution – an anthropological term that can be understood as the opposite of evolution) is the buzzword in mainland China. This concept usually refers to the competitive circumstances in the academic or work environments in China where students and workers are pushed into overwork due to the high standards caused by their even more hardworking peers. A popular Chinese blogger describes neijuan as a “bottomless internal vicious circle of competition,” quoted a post on What’s On Weibo.

Interestingly, Professor Lien and his co-authors found evidence paralleling the concept of neijuan in their study. The researchers placed their study participants in “social dilemma” games, which test people’s behavior when faced with choices that favor either individual profit or the interests of a group, with different reward systems. Between social dilemma games, participants had to engage in competition with each other for real rewards. They found that participants did their best to outperform others, even when rewards were structured in such a way that they could be shared within the group.

The impact of different reward systems

The researchers recruited more than 100 participants from Tsinghua University. Participants randomly paired up to participate in social dilemma games, before and after engaging in different forms of competitive reward systems for a laborious task.

The research team compared participants’ willingness to cooperate before and after the introduction of competition. They found an overall decline in their willingness to cooperate in social dilemma situations, which were designed to measure cooperative and trusting behavior.

Importantly, the researchers tested whether different reward systems would induce more or less competition among participants. Apart from the basic setup where participants received a fixed reward for each completed task, they introduced three other reward systems. The first system was a pure winner-take-all scenario, in which the participant who completed more tasks than their partner received the full reward, while the other participant received nothing.

The second reward setting is called the “Tullock Contest”, in which the winner is chosen at random. The participant who completed more tasks would have a higher chance of being chosen as the winner, although victory is not guaranteed. In other words, the best performer has the best chance of winning the entire reward, but the scheme is still the winner.

The third reward scenario is known as a “proportional prize contest”, in which each participant is rewarded based on the level of effort they put into the task, relative to their partner. Unlike the other two all-or-nothing mechanisms, fair sharing of the price is possible in this framework, if the two participants perform at similar levels. Surprisingly, this seemingly fairer arrangement led to less cooperation among participants in social dilemma settings. According to the results, participants’ tendency to cooperate fell the most in the classic prisoner’s dilemma game, which tests individual self-interest versus joint effort toward the common good, under this reward system, from 58% to 19%.

“This result is quite surprising and somewhat counterintuitive in that people actually reacted more competitively to a relatively less competitive payment system. When presented with the option of sharing the price fairly, they didn’t seem to take it well once opportunities for cooperation arose later.The results seem to suggest that people were more accepting of winner-takes-all situations than we originally thought.

The downside of ambition

Professor Lien explains that when the reward system was based on the effort of each participant compared to that of their partner, it is theoretically possible that the prize is shared equally, but participants do not necessarily realize that this is possible. Instead, participants have become more selfish in this setting because they believe they can earn a bigger share of the prize by working harder. In contrast, participants were more willing to cooperate in the other two winner-takes-all scenarios since sharing the reward price is not even possible in these scenarios.

The study showed that individuals’ efforts and subsequent tendencies in social situations are highly sensitive to the competitive environments they face. More importantly, the researchers wanted to emphasize that study participants remained competitive even when they weren’t interacting with the same opponents in different games. This means that the competitive situation can shape the general attitude of people away from cooperation. Additionally, the study finds that participants who said they were very ambitious to win and worked harder to win, behaved more selfishly and were less willing to cooperate in social dilemma games.

“This has a negative implication for society because social dilemma games represent situations in which individuals can potentially cooperate with each other to create more resources for everyone, but those who really want to win tend not to not do it,” says Professor Lien. “Additionally, an overemphasis on competition can affect people’s social interactions in the long run, such as having less trust in strangers and less willingness to contribute to public goods.”

In the context of the workplace, Professor Lien adds that constant competition without carefully designed reward systems could reduce people’s ability to work in teams and cooperate. In most modern organizations, competition is treated almost as an essential component of the hierarchy, for example, workers vying for limited promotions. Trying to find the best reward system from a behavioral perspective becomes very difficult, as each organization would have different needs, in terms of balancing performance incentives and maintaining a cooperative work environment.

The study points out that not only pitting workers against each other in the workplace has negative effects on cooperation, but it also extends to “softer” forms of competition which (perhaps -intuitive) can even make things worse. As the study results indicate that people behave differently under different reward schemes, future work can focus on finding the ideal compensation schemes that might bring out the best traits in people when competition is unavoidable. .

Reference:
Jaimie W. Lien, Jie Zheng and Yilin Zhuo, The Cooperative Consequences of Contests (May 21, 2021). Available on SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3850570

This article was first published on the China Business Knowledge (CBK) website by CUHK Business School: https://bit.ly/3wPxOqD

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CUHK Business School comprises two schools – Accounting and Hotel and Tourism Management – ​​and four departments – Decision Science and Management Economics, Finance, Management and Marketing. Founded in Hong Kong in 1963, it is the first business school to offer BBA, MBA and Executive MBA programs in the region. Today, CUHK Business School offers 10 undergraduate programs and 20 graduate programs, including MBA, EMBA, Master’s, MSc, MPhil, and Ph.D. The school currently has over 4,500 undergraduate students and postgraduate from more than 20 countries/regions.

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