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

Gerald Eisenkopf and Urs Fischbacher

No 63, TWI Research Paper Series from Thurgauer Wirtschaftsinstitut, Universität 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 investors transfer.

Keywords: Delegation; trust; reciprocity; intentions; exeriment (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-cbe
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Persistent link: https://EconPapers.repec.org/RePEc:twi:respas:0063

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