Competitiveness of Entrepreneurs and Salaried Workers

Loukas Balafoutas, Mongoljin Batsaikhan () and Matthias Sutter

No 14169, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We measure the willingness to compete of entrepreneurs and salaried workers in an experiment. We let participants choose between a piece-rate and a tournament scheme either in private or in public. We find that in the private condition entrepreneurs are less competitive than salaried workers, but that in the public condition this ordering is reversed. Data from a follow-up survey suggest that social image concerns of entrepreneurs and perceived norms can explain why entrepreneurs are more competitive when decisions are publicly observable. Our survey also reveals that more competitive entrepreneurs earn higher profits in their businesses.

Keywords: field behavior; salaried workers; entrepreneurs; competitiveness; profits; experiment (search for similar items in EconPapers)
JEL-codes: C91 C93 D01 L26 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2021-03
New Economics Papers: this item is included in nep-ent and nep-exp
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Published - revised version published in: Management Science, 2024, 70 (5), 2900 - 2911

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Related works:
Journal Article: Competitiveness of Entrepreneurs and Salaried Workers (2024)
Working Paper: Competitiveness of Entrepreneurs and Salaried Workers (2021)
Working Paper: Competitiveness of entrepreneurs and salaried workers (2021)
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