Constructive Intergroup Competition as a Solution to the Free Rider Problem: A Field Experiment

Abstract

Pruitt and Kimmel (1977) regard the problem of external validity as one of the biggest problems of experimental gaming, a problem that seriously limits the relevance of this research tradition to real-life settings and to other areas of social psychology. Following Pruitt and Kimmel′s dictate that "researchers try to generalize their findings," the present study attempts to generalize recent results by Bornstein, Erev, and Rosen (1990) to real-life settings. Bornstein et al. demonstrated that competition between groups can reduce free riding in an experimental Prisoner′s Dilemma Game. The present study tested the effectiveness of intergroup competition as a solution to free riding in a lifelike orange-picking task. Groups of four subjects picked oranges under three payoff conditions: personal reward, collective reward, and intergroup competition with a reward to the most efficient team. On average, the collective reward rule resulted in a 30% loss in production compared to the personal payoff rule. The intergroup competition eliminated this loss of productivity and was more effective the more similar the competing teams were with respect to overall abilities. The implications of these findings are discussed in light of a new approach to game-theoretic equilibrium solutions.