When Rivalry Backfires: How Individual Skill and Risk of Status Loss Moderate the Effects of Rivalry on Performance

Existing rivalry research finds that people try harder and perform better when competing against their rivals. However, are there conditions under which rivalry can harm performance? We integrate rivalry theory with regulatory fit theory to propose two moderators of rivalry: individual skill and situational risk for status change. We test our predictions using data from software programming contests involving more than 4.6 million competitive encounters across 16,846 software developers (“coders”) to examine the causal effects of rivalry and the conditions under which it may backfire. We find that, on average, coders who are randomly assigned to compete against a field of competitors with whom they share a rivalrous history exhibit higher performance, above and beyond other established drivers of performance in competition. Importantly, however, this positive effect of rivalry is moderated by (1) coders’ skill level, such that rivalry is more beneficial for more skilled coders and is harmful for less skilled coders, and (2) coders’ risk of experiencing a status change, such that coders who face a possible status loss exhibit decreased performance when competing against rivals. Thus, we extend research on rivalry by revealing the conditions under which it can harm performance, which is vital to understanding its role in organizations. This paper was accepted by Sameer Srivastava, organizations. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2023.00344 .