An Honest Day's Pay: Cooperation among Entrepreneurs vs. Students, and Linkages to Real‐World Business Success

Abstract

The importance of cooperative behavior in business environments has been theorized in the field of management. However, measuring cooperation quantitatively is often challenging. We take advantage of experimental methods to overcome this issue. Particularly, we study the decisions that small‐scale entrepreneurs in Ulaanbaatar, Mongolia, make in a laboratory property rights dilemma experiment, comparing these to the decisions of student counterparts in the same and other countries, and looking for correlations between lab decisions and success in real‐world business sales. We find that Mongolian entrepreneurs generally achieve much higher cooperation levels and hence higher experimental earnings than Mongolian students. Also, among individual participants, producing and desisting from theft in the lab setting is correlated at the 1% level with real‐world business sales. Our findings align with the view that cooperative impulses or abidance of social norms can be an advantage in business relationships.

The Economic Preferences of Cooperative Managers

“…Finally, the paper adds to the literature on lab-in-the-field experiments and speaks to experimental work comparing students and non-standard subjects, particularly managers and professionals (Fehr and List, 2004;Gneezy and Imas, 2016;Fréchette, 2011;Frechette, 2016;Batsaikhan, M. and Putterman, L., 2019). In all three of our experiments measuring social preferences, we find that students are less pro-social than both cooperative and conventional managers.…”

Competitiveness of Entrepreneurs and Salaried Workers

“…Cooper and Saral (2013) examine entrepreneurs' and students' willingness to form a team for collaboration, and find that entrepreneurs are less likely to join teams than non-entrepreneur subjects. Batsaikhan and Putterman (2019) show that entrepreneurs are better at sustaining high levels of cooperation in a repeated social dilemma experiment than a sample of student subjects in Mongolia. Similarly, Holm et al (2020) find that Chinese CEOs make more efficient and pro-social choices in cooperation and coordination games than a control group, so that CEOs earn higher payoffs.…”

Competitiveness of Entrepreneurs and Salaried Workers

“…Cooper and Saral (2013) examine entrepreneurs' and students' willingness to form a team for collaboration, and find that entrepreneurs are less likely to join teams than non-entrepreneur subjects. Batsaikhan and Putterman (2019) show that entrepreneurs are better at sustaining high levels of cooperation in a repeated social dilemma experiment than a sample of student subjects in Mongolia. Similarly, Holm et al (2020) find that Chinese CEOs make more efficient and pro-social choices in cooperation and coordination games than a control group, so that CEOs earn higher payoffs.…”