Competitive in the lab

5 January 2016 16:55

(updated: 18 March 2016 17:02)

Competitive in the lab

A number of laboratory experiments have analysed the willingness of people to compete. However, to what extent is competitive behaviour in the lab linked to choices and results in real life?

In a new paper, four NHH researchers have tackled the following question: Do those who are characterised as having a strong competitive instinct have greater success as entrepreneurs?

The more specific description of the study now appears in the published paper,

"Competitive in the lab, successful in the field?". This was written by Lars Ivar Oppedal Berge, Kjetil Bjorvatn, Armando Jose Garcia Pires and Bertil Tungodden (see reference).

Experiments and actual results

"We address this question in an entrepreneurial setting, whereby we combine findings about people's competitiveness in an experimental situation in the lab with data about how competitive they actually are in the field," says Lars Ivar Oppedal Berge from the Department of Accounting, Auditing and Law.

Following the experiment, the researchers collected data. Indicators of competitive choices and success in the field were the entrepreneurs' investments, employment decisions, earnings and sales.

They found strong evidence that the competitiveness in the laboratory is positively associated with results in real life. There is a positive link to success in the field.

Predictor of success

"Our findings indicate that the willingness to compete in the laboratory identifies an important trait in entrepreneurs, a quality that characterises the entrepreneur's choices and, to a certain extent, how successful they are. Competitiveness is therefore a predictor of whether the same people make big profits.

"However, we don't know if it is the case that the same people become more competitive due to having big profits or whether they make big profits because they are competitive. But, we believe that this is an important non-cognitive trait.

"This applies for micro-entrepreneurs in Tanzania, but is it also the case for entrepreneurs who do business in Norway?"

"Probably. We have also seen in other studies that what happens in the lab correlates with choices in the "real world".

Non-cognitive ability

Unlike other studies, Berge and his co-authors have done what few or no other researchers have done, i.e. looked at the actual results after the lab study.

"You could think that competitive people jump at every chance that comes along - and lose. Our study shows that it is positive for the end result, i.e. how well they do in their companies. Competitiveness is clearly the most important non-cognitive trait that stands out among the micro-entrepreneurs," Berge says.

In recent years, non-cognitive abilities, and not just IQ or knowledge, for example, have received far more attention when explaining why some succeed better than others," Berge says.

He makes special mention of Nobel Prize winner James Heckman who made note of the importance of non-cognitive traits, such as values and attitudes, to the choices we make and whether we succeed.

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