Doing well by doing good - or doing better by delegating?
AbstractMachiavelli 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.
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Bibliographic InfoPaper provided by Thurgauer Wirtschaftsinstitut, Universität Konstanz in its series TWI Research Paper Series with number 63.
Date of creation: 2011
Date of revision:
Delegation; trust; reciprocity; intentions; exeriment;
Other versions of this item:
- Gerald Eisenkopf & Urs Fischbacher, 2011. "Doing Well by doing good - or doing better by delegating?," Working Paper Series of the Department of Economics, University of Konstanz 2011-10, Department of Economics, University of Konstanz.
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
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