Competitive in the lab, successful in the field?

• Published in: Journal of economic behavior & organization 2015-10, Vol.118, p.303-317
• Main Authors: Berge, Lars Ivar Oppedal, Bjorvatn, Kjetil, Garcia Pires, Armando Jose, Tungodden, Bertil
• Format: Article
• Language: English
• Subjects: Ability tests; Behavioral decision theory; Cognition & reasoning; Cognitive ability; Competition; Competitiveness; Entrepreneurs; Entrepreneurship; Field; Lab; Profitability; Studies
• ISSN: 0167-2681; 1879-1751
• DOI: 10.1016/j.jebo.2014.11.014

•We analyze if competitive behavior in the lab predict field choices and outcomes.•Field choices: investment, employment; field outcomes: profits and sales.•Competitiveness in the lab is positively associated with field choices.•We also find suggestive evidence of a positive link to field outcomes.•Risk, patience and confidence fail to have predictive power on the field variables. A number of lab experiments in recent years have analyzed people's willingness to compete. But to what extent is competitive behavior in the lab associated with field choices and outcomes? We address this question in a setting of entrepreneurship, where we combine lab evidence on competitiveness with field evidence on investment, employment, profit, and sales. We find strong evidence that competitiveness in the lab is positively associated with competitive choices in the field (investment and employment) and weaker, but suggestive, evidence of a positive link to successful field outcomes (profit and sales). Other non-cognitive skills measured in the lab, including risk- and time preferences and confidence, and cognitive skills are less consistently associated with the field variables. Our findings suggest that the willingness to compete in the lab identifies an important entrepreneurial trait that shapes the entrepreneur's field choices and to some extent also field outcomes.