Doing well by doing good - or doing better by delegating?
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 trusteeï¿½s 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 delegateï¿½s transfer is much higher than the value of the investors transfer.
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