Competition Between Organizational Groups: Its Impact on Altruistic and Anti-Social Motivations

40 Pages Posted: 3 Dec 2011

See all articles by Lorenz Goette

Lorenz Goette

University of Lausanne; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

David Huffman

IZA Institute of Labor Economics; Swarthmore College

Stephan Meier

Federal Reserve Bank of Boston; IZA Institute of Labor Economics; Columbia Business School - Management

Matthias Sutter

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods; University of Cologne - Department of Economics

Date Written: December 1, 2011

Abstract

Firms are often organized into groups. Group membership has been shown empirically to have positive effects, in the form of increased pro-social behavior towards in-group members. This includes an enhanced willingness to engage in altruistic punishment of inefficient defection. Our paper provides evidence of a dark side of group membership. In the presence of cues of competition between groups, a taste for harming the out-group emerges: punishment ceases to serve a norm enforcement function, and instead, out-group members are punished harder and regardless of whether they cooperate or defect. Our results point to a mechanism that might help explain previous mixed results on the social value of punishment, and also contribute to understanding the sources of conflict between groups. They also point to an important tradeoff for firms: introducing competition enhances within-group efficiency, but also generates costly between-group conflict.

Keywords: Group decisions, cooperation, punishment, experiment, Army

Suggested Citation

Goette, Lorenz F. and Huffman, David and Meier, Stephan and Sutter, Matthias, Competition Between Organizational Groups: Its Impact on Altruistic and Anti-Social Motivations (December 1, 2011). Available at SSRN: https://ssrn.com/abstract=1967200 or http://dx.doi.org/10.2139/ssrn.1967200

Lorenz F. Goette

University of Lausanne ( email )

Department of Economics
Batiment Internef
Lausanne, 1015
Switzerland
(021) 692'3496 (Phone)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://www.iza.org

David Huffman

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Swarthmore College

500 College Ave
Swarthmore, PA 19081
United States

Stephan Meier (Contact Author)

Federal Reserve Bank of Boston ( email )

600 Atlantic Avenue
Boston, MA 02210
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Columbia Business School - Management ( email )

3022 Broadway
New York, NY 10027
United States

Matthias Sutter

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

University of Cologne - Department of Economics

Cologne, 50923
Germany

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