Thursday, July 12, 2018

How Good Is Competition? Pretty Bad, Actually

In many areas of life, we enjoy competition. Right now, there is lots of excitement in Wimbledon. There is even more in the World Cup, where entire nations seem to believe that they are in matches with each other – not 22 selected players, most of whom play professional football outside their home country. The excitement extends to management practices too, where various prizes and rewards are distributed along with pay adjustments, all as a function of how well each employee is thought to perform compared with others. “Competition cures laziness,” is the belief.

What could possibly go wrong? The answer is found in a paper by Henning Piezunka, Wonjae Lee, Richard Haynes, and Matthew Bothner in Proceedings of the National Academy of Science. They look at Formula 1 racing, which is a place where one can find drivers who enjoy competing and are used to competing. After all, who would drive a car at such crazy speeds very close to other cars if they didn’t think competition was a great thing to do? But even in Formula 1, there are costs to competing.

The cost is a simple and important one: close competitors collide more often. In F1 driving, colliding is never a good thing: minor collisions damage the cars and slow them down, intermediate ones make cars useless, major ones kill drivers. Yet collisions occur, and it turns out that they happen more often between drivers with similar accomplishments during the season. That’s interesting because it means that the most perilous situation is when two people are near each other in two ways – similar social status, and capable of giving each other trouble.

But wait, it gets worse. The intensified competition is seen even more clearly if the drivers are also similar in other ways. Similar-age drivers collide especially often if they have similar status. The same is true when the stakes are high, such as when the drivers are high in the tournament ranks and the season end is drawing near. These conditions sound a lot like those facing employees in firms that motivate by tournament.

This gives a good account of when we can expect F1 drivers to collide, but it also means more. Many of the modern ideas of management and motivation rely on the idea that tournaments are good and should be encouraged through various rewards and prizes. They don’t take into account the conflict that results. If they did, would these practices still be as popular as they are now?