Doing Well by doing good - or doing better by delegating?
Gerald Eisenkopf and
No 2011-10, Working Paper Series of the Department of Economics, University of Konstanz from Department of Economics, University of Konstanz
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
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-soc
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Working Paper: Doing well by doing good - or doing better by delegating? (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:knz:dpteco:1110
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