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Procedural Preferences, Self-Interest, and Communication. Evidence from a Laboratory Experiment

Philipp Harms, Claudia Landwehr (), Maximilian Lutz () and Markus Tepe ()
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Claudia Landwehr: Johannes Gutenberg-University Mainz, Germany
Maximilian Lutz: University of Oldenburg
Markus Tepe: University of Oldenburg

No 2011, Working Papers from Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz

Abstract: What determines individuals’ preferences over alternative decision-making procedures – the potential gain from these procedures or the intrinsic value assigned to them? This study tests an income redistribution game, in which subjects can endogenously determine whether to decide upon redistribution by majority voting or to delegate the decision to a randomly selected member of the group (a “random decider”). Subjects are assigned to groups of three and receive an initial endowment, the sum of endowments being common knowledge. After a choice of the decision procedure to be applied, they can choose to either redistribute endowments equally or to maintain the original allocation. We find that the share of rational egoistic procedural choices increases when the distribution of endowments is common knowledge, compared to a situation in which subjects only know their own endowment. However, a substantive share of subjects reveals a persistent preference for majority voting, regardless of their distributional interest. Support for majority voting is strongest when common knowledge of initial endowments is combined with a chat option. These findings not only suggest that majority voting is a normative default when the rational egoistic procedural choice is limited by a lack of information, but also that support for majority voting, even where it is costly to the individual, is promoted through communication.

Keywords: procedural preferences; endogenous institutional choice; majority voting; delegation; laboratory experiment (search for similar items in EconPapers)
Pages: 47 pages
Date: 2020-04-23
New Economics Papers: this item is included in nep-cdm, nep-dcm, nep-des, nep-exp, nep-ore and nep-pol
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https://download.uni-mainz.de/RePEc/pdf/Discussion_Paper_2011.pdf First version, 2020 (application/pdf)

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