Lara Ezquerra (Universitat de les Illes Balears)

Deciding to delegate: on distributional consequences of Endogenous (and Compulsory) Delegation

Hour: 12.30

Abstract:


We study delegation in a dictator game where principals choose between delegating the decision to an agent that comes from a competitive market or deciding on the allocation themselves. Around half of the subjects choose to delegate. Those that choose to delegate create more egalitarian distributions relative to those that do not delegate. This somehow contradicts the results in compulsory delegation and standard dictator game where allocations made by agents in compulsory delegation are lower. This may partly be explained by principals’ behaviour when selecting agents in a competitive market. In compulsory delegation selected agents are those allocating higher amounts to principals while in endogenous delegation this relationship is significantly weaker which may confuse agents on what principals expect from them. Principals change in behaviour when choosing agents may be motivated by social distance and the feeling of responsibility. Principals feel more detached from the final outcome in compulsory than endogenous delegation which may make them less altruist in compulsory delegation. 

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