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Intervening in Other People’s Choices: The Supply and Demand for Decision Rights

Paper Session

Saturday, Jan. 4, 2020 2:30 PM - 4:30 PM (PST)

Manchester Grand Hyatt, Gaslamp AB
Hosted By: Economic Science Association
  • Chair: Chloe Tergiman, Pennsylvania State University

Preferences for Power

Chloe Tergiman
,
Pennsylvania State University
Elena Pikulina
,
University of British Columbia

Abstract

Power—the ability to determine the outcomes of others—usually comes with various benefits: higher compensation, public recognition, etc. We develop a new game, the Power Game, and use it to demonstrate that a substantial fraction of individuals enjoy the intrinsic value of power: they accept a lower payoff in exchange for power over others, without any additional benefits to themselves. We show that preferences for power exist independently of other components of decision rights. Further, these preferences cannot be explained by social preferences, are stable over time and are not driven by mistakes, confusion or signaling intentions. Using a series of additional experiments, we show that (i) power is related to determining outcomes of others directly as opposed to simply influencing them; (ii) depends on how much freedom the decision-maker has over deciding those outcomes; (iii) is tied to relationships be-tween individuals and not necessarily organizations; and (iv) likely depends on the domain: power is salient in work-place settings but not necessarily in others. We establish that ignoring preferences for power may have large welfare implications. Consequently, our findings provide strong reasons for incorporating power preferences in the study and design of political systems and labor contracts.

The Impact of Agency on Time and Risk Preferences

Ayelet Gneezy
,
University of California-San Diego
Alex Imas
,
Carnegie Mellon University
Ania Jaroszewicz
,
Harvard University

Abstract

Scholars have long argued for the central role of agency in the human experience. In this paper, we demonstrate the importance of agency in shaping people’s patience and risk tolerance. We focus on the context of resource scarcity, which has been associated with both impatience and a lack of agency. Using data from a representative sample of over 86,000 individuals worldwide and two experiments, we replicate the decrease in patience among those exposed to scarcity. However, we show that endowing individuals with agency over scarcity fully moderates this effect, increasing patience substantially. We further show that agency’s impact on patience is partly driven by greater risk tolerance. These results hold even though individuals with greater agency do not exercise it; simply knowing one could alleviate one’s scarcity is sufficient to change behavior. Finally, we demonstrate that these effects of agency generalize beyond scarcity, highlighting the potential for agency-based policy and institutional design.

Projective Paternalism

Ambuehl Sandro
,
University of Toronto
B. Douglas Bernheim
,
Stanford University
Axel Ockenfels
,
University of Cologne

Abstract

We study when, why, and how people intervene in others' choices with paternalistic objectives. In our experiment, Choice Architects construct choice sets containing bundles of time-indexed payments for Choosers. Choice Architects frequently withhold options to prevent impatient choices, in spite of ample opportunities to provide advice, believing their interventions benefit the Choosers. How do Choice Architects decide which choices to prevent? A conventional behavioral welfarist acts as a benevolent and correctly informed social planner; an introspective paternalist tries to help others avoid choices she wishes she could reject when making decisions for herself; and a projective paternalist seeks to bring others' choices in line with her own. We find that projective paternalism provides the best rationalization for observed interventions by Choice Architects. We also show that projective paternalism in the laboratory coincides with support for actual paternalistic policies.

On the Roots of the Intrinsic Value of Decision Rights: Experimental Evidence

Joao Ferreira
,
University of Southampton
Hanaki Nobuyuki
,
Osaka University
Benoit Tarroux
,
University of Lyon

Abstract

This paper aims to investigate the motives behind an intrinsic value of decision rights. Based on a series of experimental treatments conducted in France and Japan, we measure how much of such potential value stems from (i) a desire for independence from others, (ii) a desire for power, or (iii) a desire for self-reliance. We find that both Japanese and French subjects attach a significant intrinsic value to hold control. Surprisingly, we find that self-reliance is the only significant motive behind it in both countries.
Discussant(s)
James Cox
,
Georgia State University
Yoram Halevy
,
University of Toronto
Tristan Gagnon-Bartsch
,
Harvard University
Marina Agranov
,
California Institute of Technology
JEL Classifications
  • C9 - Design of Experiments
  • D9 - Micro-Based Behavioral Economics