Agency, Benevolence and Justice

Prithvijit Mukherjee and J Tracy

Working Papers from Chapman University, Economic Science Institute

Abstract: We test for social norms regarding how Agents should select between risky prospects for Principals, including norms consistent with observations by Adam Smith. We elicit norms from subjects serving as ``impartial spectator[s]" about the choice of risky prospects selected by the Agents. We find strong evidence for the existence of norms, consistent with Smith's observations. Furthermore, we find that Agents are more likely to select more normative options. In contrast, we find that Principals' allocation for bonuses depends on the realization of the risky prospect rather than whether the Agents' choice was consistent with the norm.

Keywords: Social norms; Decisions-making for others; Laboratory experiments; Principal-Agent; Decisionmaking under risk (search for similar items in EconPapers)
JEL-codes: C9 D63 D81 D90 G41 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-hpe and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:chu:wpaper:22-03

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