Contest attributes

Lazear (1989) warns that organizations should not introduce contests in the form of tournaments without considering the specific circumstances. For example, cooperation among employees may be too important for the organization to jeopardize it by introducing competition. While it is certainly important to consider the circumstances in which a contest takes place, it is equally important to examine how exactly the contest is designed. There are multiple attributes that characterize a contest, such as the number of contestants, the

distribution of prizes (i.e., the prize spread), and the provision of intermediate feedback on ranking. Many of these attributes have been researched with regard to their effect on employee performance, and some have also been researched with regard to their effect on unethical behavior. These attributes will be discussed in greater detail in the following sections.⁸

3.2.1. Number of contestants

A smaller number of contestants is associated with higher performance a phenomenon that ha been nicknamed he n-effec (Dechenaux et al., 2015; Garcia & Tor, 2009; Vandegrift

& Holaday, 2012). Theoretical work suggests that small numbers of contestants may also be related to higher degrees of sabotage (Gilpatric, 2011). The explanation for this effect is that sabotage simultaneously produces negative externalities for the victim and positive

externalities for all other contestants (Chowdhury & Gürtler, 2015; Konrad, 2000). In other words, all contestants (except for the victim) gain the same advantage as the saboteur.

Moreover, as group size increases, the number of competitors that the saboteur needs to undermine in order to improve significantly his or her chances of winning also increases and, as sabotage is costly, it becomes less attractive. However, despite these clear theoretical predictions, the link between group size and sabotage has not yet been tested (Chowdhury &

Gürtler, 2015).

Looking at cheating, the situation looks somewhat different. Cheating creates a negative externality for all o he con e an beca e i ed ce he o he con e an

8 We acknowledge the existence of more general determinants of unethical behavior, such as the possibility of getting punished when caught cheating or the mere likelihood of getting caught (Gilpatric, 2011). However, an extensive discussion of such paths is beyond the scope of the paper because they are general strategies to decrease unethical behavior and not specific to contests. For an overview of punishment in organizations, the reader may refer to Treviño (1992) or Balliet, Mulder, and Van Lange (2011).

probability of winning (Konrad, 2000). This suggests that cheating should not be related to group size or, if anything, that the relation between cheating and group size should be

positive, because in larger groups the negative externality affects more competitors (Konrad, 2000). Harbring and Irlenbusch (2008) tested this prediction. They conducted an experiment with groups of one principal plus two, four, or eight agents who chose how much costly effort

o e pend and ha le el of abo age o engage in. Ho e e , an agen deci ion o

sabotage entailed negative externalities for all other contestants, so the saboteur was the only one who benefited from his or her behavior. Arguably, therefore, this setup resembles more a case of cheating than of sabotage (Chowdhury & Gürtler, 2015). And in line with the

prediction that cheating should not be related to group size, Harbring and Irlenbusch (2008) find no effect of the number of contestants.

3.2.2. Wage sum

Performance in contests increases with the wage sum, i.e., the overall value of prizes

(Harbring & Irlenbusch, 2011). Does sabotage in tournaments depend on the wage sum, too?

Empirical evidence suggests that the wage sum is not a predictor of unethical behavior in contests. Harbring and Irlenbusch (2011) conducted a study with groups of three agents and one principal. The principal could decide between running a contest with a high and a low

age m. The p i e p ead emained con an in bo h condi ion (e.g., he inne p i e a al a 48 ni highe han he lo e p i e). The da a gge ha he e a no difference between the levels of sabotage that the agents chose when the wage sums were high and when they were low.

3.2.3. Prize spread

One of the most extensively researched contest attribute is prize spread, i.e., the distribution of prizes that can be won in a contest (Falk, Fehr, & Huffman, 2008; Lazear & Rosen, 1981).

In a simple contest between two individuals with a total prize (i.e., wage sum) of $100, the largest possible prize spread would be awarding $100 to the winner and $0 to the loser, whereas a very small prize spread would be awarding $51 to the winner and $49 to the loser.

It has been demonstrated that larger prize spreads lead to higher effort in contests (Garicano

& Palacios-Huerta, 2005; Harbring & Lunser, 2008; Lazear & Rosen, 1981), but at the same time they may lead to more unethical behavior. Various laboratory experiments have shown that agents choose higher levels of sabotage when prize spreads increase (Falk et al., 2008;

Harbring & Irlenbusch, 2005, 2011; Vandegrift & Yavas, 2010).

Further evidence for the effect of prize spread on sabotage comes from a field study on soccer matches (Garicano & Palacios-Huerta, 2005). Before 1994, soccer teams received two points for winning a match, one point for a tie, and no points for losing. In 1994, the rules were changed in some parts of the world, so that winning teams received three points, while a tie and losing still yielded one and zero points respectively. The prize spread was thus increased. As the new rules applied only in specific parts of the world, some teams played according to both rules in the same season, depending on where the match took place. The results of this natural experiment confirm that the increased prize spread led the players to exert more effort, but also more sabotage in the form of so-called di pla (Garicano &

Palacios-Huerta, 2005).

Experimental evidence suggests a link of prize spread and cheating, too. For example, subjects overstate their performance in contests with larger prize spreads (Conrads et al., 2014; Feltovich, 2019). However, Cartwright and Menezes (2014) contradict the positive relation between prize spread and cheating. They manipulated prize spread in a lab experiment by awarding bonus payments either to the best six (small prize spread) or two (large prize spread) out of 15 contestants. Their results suggest that subjects cheated more when the prize spread was lower. A possible explanation for these results is that the psychological costs of cheating did not outweigh the relatively low chance of winning the bonus in the low prize spread condition (Cartwright & Menezes, 2014).

3.2.4. Transparency

Someone who considers sabotaging a competitor to gain an advantage needs to be aware of his or her own rank and the rank of the competitors. If this information is withheld from the contestants (e.g., Konrad, 2000), they will not know who to sabotage. Sabotaging someone

ho ank lo , o a lea belo a con e an o n ank, i a a e of e o ce . In con a , the top ranking competitors are the most dangerous and therefore the likeliest victims of sabotage (Gilpatric, 2011; Gürtler, Münster, & Nieken, 2013).

Gürtler et al. (2013) designed an experiment to test the hypothesis that less

transparency on ranks will result in lower levels of sabotage (Gilpatric, 2011; Gürtler et al., 2013). In their experiment, groups of three subjects performed a chosen effort task. The a ho de e mined he he he con e an o ld be able o ob e e each o he effo (rank) or not before the contestants decided whether they wanted to sabotage one of the others. The results of this experiment confirmed that effort is associated with being

sabotaged. The subjects whose high degree of effort could be observed were punished by the

other contestants. But when the contestants had no information about thei compe i o effort, they did not know whom to sabotage, so effort was no longer related to being sabotaged. As a consequence, participants were more willing to expend high effort when info ma ion abo he o he compe i o pe fo mance a concealed. The authors do not cla if , ho e e , he he a lack of an pa enc abo compe i o effo le el gene all reduced sabotage or whether sabotage was just more equally distributed.

3.2.5. Framing

Another contest attribute that has been empirically tested is how a contest is framed. Framing refers to different ways of designing the structure of choices available to the contestants, which influences how exactly the contestants perceive competition. For example, making sabotage explicit and calling the practice by its name appears to reduce that kind of unethical behavior. Harbring and Irlenbusch (2011) conducted a lab experiment in which participants had the option to sabotage each other. In one condition, this option was explicitly called

abo age, hile in ano he condi ion he e m abo age a a oided ( he op ion had neutral labels). The results of this experiment indicate that explicit references to sabotage make its occurrence less likely. At the same time, there was no effect of framing on effort.

Pettit et al. (2016) provide another example of how framing affects behavior. In their experiments on competition and cheating, the authors framed otherwise identical contests in two different ways. In one setting the contest was framed as a chance to gain in status when getting ahead; in the other setting the contest was framed as a risk of losing in status when falling behind. In all variations of this experimental design, the participants were more inclined to cheat in order to avoid losing status rather than to gain in status. While the effect of gain versus loss framing on unethical behavior (mostly cheating) has been widely

replicated (Grolleau, Kocher, & Sutan, 2016; Kern & Chugh, 2009; Schindler & Pfattheicher, 2017), Pe i e al. (2016) study remains the only one that focused on contests.