Doing Well by doing good - or doing better by delegating?

Gerald Eisenkopf and Urs Fischbacher

No 2011-10, Working Paper Series of the Department of Economics, University of Konstanz from Department of Economics, University of Konstanz

Abstract: Machiavelli advises against delegating the distribution of favors. We test this claim in an experiment, in which an investor can directly transfer money to a trustee or delegate this decision to another investor. Varying the value of the transfers of the investor and the delegate, we find that the trustee’s rewards follow a rather simple pattern. In all situations, both investors are rewarded, but the person who actually decides gets a higher reward. Delegation only pays off for the initial decision maker if the value of the delegate’s transfer is much higher than the value of the investor’s transfer.

Keywords: Delegation; trusts; reciprocity; intentions; experiment (search for similar items in EconPapers)
JEL-codes: C91 D63 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2011-02-14
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-soc
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Citations: View citations in EconPapers (1)

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Working Paper: Doing well by doing good - or doing better by delegating? (2011)
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