Do high stakes and competition undermine fair behaviour? Evidence from Russia
This paper reports the results of a series of competitive labour market experiments in whichsubjects have the possibility to reciprocate favours. In the high stake condition subjectsearned between two and three times their monthly income during the experiment. In thenormal stake condition the stake level was reduced by a factor of ten. We observe that bothin the high and the normal stake condition fairness concerns are strong enough to outweighcompetitive forces and give rise to non-competitive wages. There is also no evidence thateffort behaviour becomes generally more selfish at higher stake levels. Therefore, our resultssuggest that fairness concerns may play an important role even at relatively high stakelevels.