To Win or to Profit: How Rivalry Affects Payoff Decisions in Interdependent Situations

Abstract

This paper explores how existing relationships between competitors can shift them from self-focused, reward-maximizing pursuits to peer-focused, competitive pursuits. Building upon recent research on rivalry, we explore the consequences of this unique relationship for decision-making in situations of interdependence. Across three studies involving members of different countries, members of different universities, and coworkers, we found that decisions made by individuals paired with rivals differed significantly from the decisions of individuals paired with non-rivals. Of particular note, we observed that individuals paired with rivals were more willing to sacrifice their absolute outcomes in order to achieve relatively favorable outcomes vis-a-vis their rivals, and to trade off financial value for the opportunity to compete against and potentially defeat their rivals. Importantly, some of these effects of rivalry were eliminated by status affirmation, suggesting a potential intervention that can mitigate the detrimental consequences to rivalry. These findings contribute to literatures on rivalry, decision-making, and social value orientation, and suggest a number of important implications for employees and managers.