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Illusion of Control and the Pursuit of Authority

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  • Randolph Sloof
  • Ferdinand von Siemens

Abstract

In a laboratory experiment, we measure subjects’ willingness to pay for a transparently useless decision right concerning the choice between two real effort tasks. We also elicit for each participant her change in beliefs about the likelihood of receiving her preferred task if she rather than another participant makes the decision. Participants pay more to keep control if they - irrationally - believe that they can increase the probability of getting their preferred task by keeping control. We thus document that illusion of control exists in a controlled environment with monetary incentives, and that illusion of control might affect people’s pursuit of authority.

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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 4764.

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Date of creation: 2014
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Handle: RePEc:ces:ceswps:_4764

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Related research

Keywords: control preferences; illusion of control; allocation of decision rights;

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References

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  1. Ernst Fehr & Holger Herz & Tom Wilkening, 2012. "The lure of authority: Motivation and incentive effects of power," ECON - Working Papers, Department of Economics - University of Zurich 099, Department of Economics - University of Zurich.
  2. Gunnthorsdottir, Anna & McCabe, Kevin & Smith, Vernon, 2002. "Using the Machiavellianism instrument to predict trustworthiness in a bargaining game," Journal of Economic Psychology, Elsevier, Elsevier, vol. 23(1), pages 49-66, February.
  3. Michael Kosfeld & Armin Falk, 2006. "The Hidden Costs of Control," American Economic Review, American Economic Association, American Economic Association, vol. 96(5), pages 1611-1630, December.
  4. Gary Charness & Uri Gneezy, 2010. "Portfolio Choice And Risk Attitudes: An Experiment," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 48(1), pages 133-146, 01.
  5. Juan Dubra & Jean-Pierre Benoit, 2011. "Apparent Overconfidence," Documentos de Trabajo/Working Papers, Facultad de Ciencias Empresariales y Economia. Universidad de Montevideo. 1106, Facultad de Ciencias Empresariales y Economia. Universidad de Montevideo..
  6. Björn Bartling & Ernst Fehr & Holger Herz, 2013. "The Intrinsic Value of Decision Rights," CESifo Working Paper Series 4252, CESifo Group Munich.
  7. Silvia Dominguez-Martinez & Randolph Sloof & Ferdinand von Siemens, 2010. "Monitoring your Friends, not your Foes: Strategic Ignorance and the Delegation of Real Authority," CESifo Working Paper Series 3172, CESifo Group Munich.
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