Everyone is a Winner: Promoting Cooperation Through All-Can-Win Intergroup Competition

29 Pages Posted: 21 Apr 2009

See all articles by Ernesto Reuben

Ernesto Reuben

New York University (NYU) - New York University, Abu Dhabi; IZA Institute of Labor Economics

Jean-Robert Tyran

University of Vienna; University of Copenhagen - Department of Economics; Centre for Economic Policy Research (CEPR)

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Abstract

We test if cooperation is promoted by rank-order competition between groups in which all groups can be ranked first, i.e. when everyone can be a winner. This type of rank-order competition has the advantage that it can eliminate the negative externality a group's performance imposes on other groups. However, it has the disadvantage that incentives to outperform others are absent if groups perform at the same level and it therefore does not eliminate low-cooperation equilibria. We find that all-can-win competition produces a universal increase in cooperation and benefits a majority of individuals if incentives to compete are strong.

Keywords: intergroup competition, cooperation, public goods, experiment

JEL Classification: H41, M52, C92

Suggested Citation

Reuben, Ernesto and Tyran, Jean-Robert, Everyone is a Winner: Promoting Cooperation Through All-Can-Win Intergroup Competition. IZA Discussion Paper No. 4112, Available at SSRN: https://ssrn.com/abstract=1391784 or http://dx.doi.org/10.2139/ssrn.1391784

Ernesto Reuben (Contact Author)

New York University (NYU) - New York University, Abu Dhabi ( email )

PO Box 129188
Abu Dhabi
United Arab Emirates

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Jean-Robert Tyran

University of Vienna ( email )

Oskar-Morgenstern-Platz 1
Vienna, Vienna 1090
Austria

HOME PAGE: http://homepage.univie.ac.at/jean-robert.tyran/

University of Copenhagen - Department of Economics ( email )

Øster Farimagsgade 5
Bygning 26
1353 Copenhagen K.
Denmark
+45 353 23 027 (Phone)

HOME PAGE: http://www.econ.ku.dk/tyran/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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