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Doing well by doing good - or doing better by delegating?

Author

Listed:
  • Gerald Eisenkopf
  • Urs Fischbacher

Abstract

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 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.

Suggested Citation

  • Gerald Eisenkopf & Urs Fischbacher, 2011. "Doing well by doing good - or doing better by delegating?," TWI Research Paper Series 63, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
    • Handle: RePEc:twi:respas:0063
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    Cited by:

    1. Hausfeld, Jan & Fischbacher, Urs & Knoch, Daria, 2020. "The value of decision-making power in social decisions," Journal of Economic Behavior & Organization, Elsevier, vol. 177(C), pages 898-912.

    More about this item

    Keywords

    Delegation; trust; reciprocity; intentions; exeriment;
    All these keywords.

    JEL classification:

    • 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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