Amos Schurr

Winning a competition predicts dishonest behavior

Significance Competition is prevalent. People often resort to unethical means to win (e.g., the recent Volkswagen scandal). Not surprisingly, competition is central to the study of economics, psychology, sociology, political science, and more. Although we know much about contestants’ behavior before and during competitions, we know little about contestants’ behavior after the competition has ended. Connecting postcompetition behaviors with preceding competition experience, we find that after a competition is over winners behave more dishonestly than losers in an unrelated subsequent task. Furthermore, the subsequent unethical behavior effect seems to depend on winning, rather than on mere success. Providing insight into the issue is important in gaining understanding of how unethical behavior may cascade from exposure to competitive settings. Winning a competition engenders subsequent unrelated unethical behavior. Five studies reveal that after a competition has taken place winners behave more dishonestly than competition losers. Studies 1 and 2 demonstrate that winning a competition increases the likelihood of winners to steal money from their counterparts in a subsequent unrelated task. Studies 3a and 3b demonstrate that the effect holds only when winning means performing better than others (i.e., determined in reference to others) but not when success is determined by chance or in reference to a personal goal. Finally, study 4 demonstrates that a possible mechanism underlying the effect is an enhanced sense of entitlement among competition winners.

The Effect of Giving It All Up on Valuation: A New Look at the Endowment Effect

In three experiments we show that the endowment effect---the tendency to demand more money for relinquishing owned goods than one is willing to pay for the same goods---fails to emerge when sellers are not fully depleted of their endowment. This finding is incompatible with prospect theorys account of the effect as stemming primarily from aversion to loss relative to the individuals current state. We suggest a new account of the endowment effect as reflecting the human aversion to “giving it all up” rather than simply an aversion to incurring any loss relative to the status quo. Experiments 1 and 2 show the effect employing a pricing paradigm. Experiment 3 examines what constitutes “all” in the giving-it-all-up effect. This paper was accepted by Uri Gneezy, behavioral economics.

Cognitive Biases in Government Procurement – An Experimental Study

Competitive bidding (CB) is the dominant governmental contracting mechanism by which hundreds of billions of dollars are allocated annually. We claim that when bid evaluators assess the qualitative components of competing bids while being exposed to the bid prices, a systematic bias occurs that gives an unjust advantage to the lower bidder. We term this the Lower-Bid Bias. It is then shown that this bias can be neutralized by splitting the evaluation process into two stages, whereby bid price is revealed only after the evaluation process has culminated (two-stage CB). This is demonstrated through the findings of a survey and three controlled experiments, the first to be conducted with procurement officials. We also explain why this bias is undesirable and suggest a mandatory rule, requiring two-stage CB for any competitive public procurement based on evaluation criteria other than price. Further applications of the experiments’ findings are also discussed.