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The Intrinsic Value of Decision Rights

Author

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  • Björn Bartling
  • Ernst Fehr
  • Holger Herz

Abstract

Philosophers, psychologists, and economists have long argued that certain decision rights carry not only instrumental value but may also be valuable for their own sake. The ideas of autonomy, freedom, and liberty derive their intuitive appeal – at least partly – from an assumed positive intrinsic value of decision rights. Proving the existence of this value and measuring its size, however, is intricate. Here, we develop an experimental method capable of achieving these goals. The data reveal that – across different parameterizations – the large majority of our subjects intrinsically value decision rights beyond their instrumental benefit. The existence of an intrinsic value of decision rights helps understand the allocation of decision rights in practice, and it has implications for their optimal allocation in organizations, economic institutions, and society at large.

Suggested Citation

  • Björn Bartling & Ernst Fehr & Holger Herz, 2013. "The Intrinsic Value of Decision Rights," CESifo Working Paper Series 4252, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_4252
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    File URL: http://www.cesifo-group.de/DocDL/cesifo1_wp4252.pdf
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    References listed on IDEAS

    as
    1. David Owens Jr. & Zachary Grossman Jr. & Ryan Fackler Jr., 2014. "The Control Premium: A Preference for Payoff Autonomy," American Economic Journal: Microeconomics, American Economic Association, vol. 6(4), pages 138-161, November.
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    More about this item

    Keywords

    decision rights; intrinsic value; authority;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights

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