The Intrinsic Value of Decision Rights: A Note on Team vs Individual Decision-Making

Justin Buffat, Matthias Praxmarer () and Matthias Sutter
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Justin Buffat: University of Lausanne
Matthias Praxmarer: Max Planck Institute for Research on Collective Goods

No 2020_30, Discussion Paper Series of the Max Planck Institute for Research on Collective Goods from Max Planck Institute for Research on Collective Goods

Abstract: Team decision-making prevails in modern organizations. Teams often need to decide whether to delegate or make a decision themselves. Recent work has found that many individuals assign a significantly positive intrinsic value to having a decision right, which may distort the choice between delegating a decision or not. Here we examine experimentally whether teams are also prone to such distortions. While in the aggregate we find no differences between individuals and teams, we uncover an important heterogeneity within teams. Teams with a smooth decision making process have much lower intrinsic values of decision rights than individuals, often not even significantly different from zero. Yet, teams with conflicts in reaching a decision have very high intrinsic values of decision rights, thus distorting decisions. Hence, the team decision making process is of significant importance for the decision-making quality in organizations.

Keywords: Decision rights; intrinsic value; team decision making; experiment (search for similar items in EconPapers)
JEL-codes: C92 D23 D80 (search for similar items in EconPapers)
Date: 2020-12
New Economics Papers: this item is included in nep-cdm and nep-exp
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Citations: View citations in EconPapers (1)

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