« Worst-Case Scenarios | Main | CEO compensation and the marginal product of the CEO »

The New Invisible Competitors

That is the title of my piece in the new Wilson Quarterly, not on-line anytime soon and yes you should subscribe.  The piece looks at how people emotionally respond to the move from neighborhood, face-to-face competition to competition at a distance, or what I call invisible competition.  Some people will fare better in this new environment than others; for instance people who rely on adrenalin to compete will find it harder to motivate themselves in this new and more impersonal environment:

The greatest gains in this new world are likely to go to people who are methodical planners or who love the game for its own sake. Some people plot their competitive strategies far in advance. These planners—be they crazy or just highly productive—don’t need anyone breathing down their necks, and indeed they often work best alone or in very small groups. Bill Gates is a classic example. Planners’ behavior may manifest itself in very competitive forms, but their underlying psychology is often not very rivalrous at all. They are ordering their own realities, usually for their individual psychological reasons, rather than acting out of a desire to trounce the competition. Early risers will also be favored. These people enjoy being first in line, or first to use a new idea, for its own sake.

Of course many of us miss face to face competition, so we try to recreate it in trivial ways, sometimes using our children:

As the concrete manifestations of the more important contests of love and business vanish, we recreate up-close rivalry to make our lives feel more real. I suspect that this helps explain the growing appetite for televised athletics and organized sports for children as well as the vogue for reality TV series such as Survivor and American Idol, eating contests, and even spelling bees. Because children are a cheap labor supply and willing to engage in all sorts of behavior for a chance at a prize or parental approval, they often serve as the vehicle for parents who seek to live out their desire for head-to-head competition vicariously. Spelling, for example, does not interest many people (who sits around practicing?), but bees exemplify the competitive spirit in action. The challenge to spell autochthonous, panmyelopathy, or warison will bring one kid to tears and another to triumph.

Posted by Tyler Cowen on October 12, 2007 at 05:50 AM in Economics | Permalink

Comments

Prof Cowen, I really love MR and have been a loyal reader since 2004. Your analytical skills in economics are absolutely first-rate.

For your sake, I hope you don't descend into Thomas Friedman-esque type megapunditry about stuff you don't know much about. I would really, really hate that. Krugman has done that and has paid a price of some erstwhile loyal readers.

Posted by: sa at Oct 12, 2007 6:57:31 AM

I hope you follow SA's advice. After reading the summary of your piece, I wonder who reads the Wilson Quarterly.

Posted by: Edgardo at Oct 12, 2007 8:35:26 AM

Maybe its a summarization problem but the three grafs seem orthogonal.

First: The number of identified and potential competitors in a field increase in a global market. This
increases the cost and error in forecasting one's competition over the medium term. Implies higher not
lower competition and greater uncertainty / frustration in not knowing who we must beat to win.

Second: Advantage to those who are not motivated to win well known games but are highly motivated to
achieve self-identified goals. Arguably true but Gates is not a good example as he's in the super elite
as the worlds richest man. The super elite competitors in world games (eg Beckham, Ronaldo) are also
better off in this world. The local market winners one level down lose out to the global stars.

Third: "concrete manifestations of the more important contests of love and business vanish" why? Business
isn't less competitive, though we might be nostalgic for a simpler framework of competition. And I'm
really not sure how to worry I'll lose marketshare in my wife to the Chinese.

Tyler, can you clarify the implications here?

Posted by: mkl at Oct 12, 2007 9:26:21 AM

I clarified the introduction a bit...

Posted by: Tyler Cowen at Oct 12, 2007 9:33:42 AM

Thanks. And seems right. As a fund manager I can pretty easily tell if I've been winning or not, but
it's not at all clear who the opponent is.

Posted by: mkl at Oct 12, 2007 10:21:56 AM

This doesn't track what I've read of Bill Gate's personal biography. Another example may be necessary.

Posted by: Prestopundit at Oct 12, 2007 1:06:31 PM

How does this differ from the development of exchanges (trade) as inter-personal (person to person, family to family, tribe to tribe) into non-personal exchanges where the originator of the good (and often of the services) and the recipient are unknown to one another?

R. Richard Schweitzer
s24rrs@aol.com

Posted by: R. Richard Schweitzer at Oct 12, 2007 2:11:59 PM

It sounds like a very libertarian future. I hope Tyler is right. Competition in the office gets ugly.

As does the sexism, racism, nepotism that business competition often brings.

Posted by: thehova at Oct 12, 2007 5:01:03 PM

An executive who had the misfortune to negotiate face to face with Bill Gates told me he did not share your opinion of the non-personal nature of his motivations toward rivalry.

Posted by: Steve Sailer at Oct 12, 2007 7:15:52 PM

DR PETER TEIMAN FRANKLIN here,
Face-to-face competition has many merits and downfalls.
DOCTOR PETER TEIMAN FRANKLIN
Sweden

Posted by: DR PETER TEIMAN FRANKLIN at Oct 12, 2007 11:13:28 PM

DR PETER TEIMAN FRANKLIN here,
Implicit competition on a face-to-face basis is more palpable.
DOCTOR PETER TEIMAN FRANKLIN
Sweden

Posted by: DR PETER TEIMAN FRANKLIN at Oct 12, 2007 11:14:45 PM

Sounds fascinating - like something Virginia Postrel would write. I will pick up a copy!

Posted by: Ben Casnocha at Oct 13, 2007 2:49:30 PM

First off, since the notion is on invisible competition, I want to ask who the "winners" would be. Would it be those who are competing simply for the love of the game, or would it be those who are recreating the competition? Personally, I feel those who are genuinely interested in the game will be the ones to come out on top. As an illustration of my point, consider the reality TV example. How many of these shows will defy years of watchers? Most of them are short lived. Although there are numerous reality shows televised, the majority of them are unlikely to be the next Mash.

I feel that commitment and motivation are the strongest forces of competition. In relation to this, commitment and motivation are going to be the most fierce in situations where the competition is real. One must have something to be committed to, and likewise, motivated for. These competitors are the ones who have something to strive for. When nothing substantial or real is at stake, an individual has less reason to compete.

In addition, I agree with the comment that the underlying psychology of competition is not very rivalrousat all. Most competition is within one's self; not against someone else. People want to know that theycan achieve this or that, and it is sometimes just coincidental that they end up out-competing someone else. Those who plan in advance and work hard, whether in a group or alone, are the ones who have aninternal force pushing them. They maintain a stake in the outcome, and succeed because they don't stop until they come out on top. They have their strategies laid out, and are able to work accordingly; they don't just whimsy their way through an unorganized approach in hopes of accomplishing something. Their competition is real, and their determination and commitment brings victory.

Posted by: M. Bowling 9751 at Oct 15, 2007 5:35:50 PM

Schumpeter was right!

Posted by: at Jan 21, 2008 6:20:16 PM

徵信社
徵信
徵信社

Posted by: 鑽石 at Apr 2, 2008 10:38:31 PM

Post a comment