How Does Dishonesty Affect Winning and the Willingness to Compete? Evidence from a Stiff Competition Environment

We experimentally investigate how the possibility of behaving dishonestly affects the willingness to compete and who the winner is when there is stiff competition. Our results show that although only some subjects are dishonest when competing, dishonest behaviour creates significant inefficiencies due to best performing subjects not winning. Willingness to compete, on the other hand, was unaffected. Key-words: Competition; dishonesty; experiment. JEL code: C91; D03; D04. a Corresponding author. Department of Management and Engineering, Division of Economics, Linköping University, 581 83 Linköping, Sweden; [email protected] b Department of Management and Engineering, Division of Economics, Linköping University, Linköping, Sweden; Present address: Centre for Languages and Literature, The Faculties of Humanities and Theology, Lund University, Lund, Sweden; [email protected] c Department of Economics, University of Gothenburg, Gothenburg, Sweden; Department of Management and Engineering, Division of Economics, Linköping University, Linköping, Sweden; [email protected]