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Effciency Concern under Asymmetric Information

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  • Winschel, Evguenia
  • Zahn, Philipp
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    Abstract

    Experimental evidence from simple distribution games supports the view that some individuals have a concern for the effciency of allocations. This motive could be important for the implementation of economic policy proposals. In a typical lab experiment, however, individuals have much more information available than outside the lab. We conduct a lab experiment to test whether asymmetric information influences prosocial behavior in a simple non-strategic interaction. In our setting, a dictator has only limited knowledge about the benefits his prosocial action generates for a recipient. We find that a substantial share of subjects behaves proscially and a concern for effciency plays an important role. In our experiment the information asymmetry is actually effciency-enhancing as more subjects behave prosocially than under symmetric information.

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    Paper provided by University of Mannheim, Department of Economics in its series Working Papers with number 13-07.

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    Date of creation: 2012
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    Handle: RePEc:mnh:wpaper:33005

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