Not all group members are created equal: heterogeneous abilities in inter-group contests
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Not all group members are created equal: heterogeneous abilities in inter‑group contests Francesco Fallucchi1 · Enrique Fatas2,3,4 · Felix Kölle5 · Ori Weisel6 Received: 18 December 2018 / Revised: 5 August 2020 / Accepted: 3 September 2020 © The Author(s) 2020
Abstract Competition between groups is ubiquitous in social and economic life, and typically occurs between groups that are not created equal. Here we experimentally investigate the implications of this general observation on the unfolding of symmetric and asymmetric competition between groups that are either homogeneous or heterogeneous in the ability of their members to contribute to the success of the group. Our main finding is that relative to the benchmark case in which two homogeneous compete against each other, heterogeneity within groups per se has no discernable effect on competition, while introducing heterogeneity between groups leads to a significant intensification of conflict as well as increased volatility, thereby reducing earnings of contest participants and increasing inequality. We further find that heterogeneous groups share the labor much more equally than predicted by theory, and that in asymmetric contests group members change the way in which they condition their efforts on those of their peers. Implications for contest designers are discussed. Keywords Contests · Groups · Abilities · Heterogeneity · Experiments JEL Classification C72 · D72 · C92 · H4
1 Introduction Many situations in social and economic life are characterized by rivalry and conflict between two or more competing parties. Warfare, socio-political conflicts, political elections, lobbying, R&D competitions, and promotion tournaments, are all examples of inter-group conflicts in which groups spend scarce and costly resources in order to compete with other groups. Within each competing group, group members Electronic supplementary material The online version of this article (https://doi.org/10.1007/s1068 3-020-09677-5) contains supplementary material, which is available to authorized users. * Enrique Fatas [email protected] Extended author information available on the last page of the article
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may differ with respect to a variety of characteristics such as preferences, resources, wealth, productivity, or motivation, which, in turn, can affect their ability and willingness to compete. Acknowledging that such within-group heterogeneity is the rule rather than the exception, a straightforward implication is that competing groups are rarely identical, and contests are typically not symmetric. Examples abound. For instance, countries competing for access to natural resources or geopolitical influence will typically (if not always) differ regarding the degree of diversity in society, such as the distribution of income, education, or other sociodemographic characteristics. In the domain of organizations, firms often rely on interfirm alliances to compete with other firms or alliances (for example in the context of develo
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