Essays on decision making in social environments.
2011-08
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Essays on decision making in social environments.
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2011-08
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Abstract
Individuals who respond to those that affect them may be influenced primarily by
the actions or intentions of those they are responding to or to the outcomes their
actions produce. Recent experimental economic studies and predictions adapted
from behavioral economic theories of fairness suggest that individuals respond primarily
to intentions. In Chapter 1 we present an experiment called the “accountability
game”. Using the data from the experiment and an alternative framework,
we demonstrate and rationalize the opposite conclusion, i.e. outcomes loom larger
than actions or intentions in accountability judgments, even when they do not
provide information about actions. The experimental design consists of one subject
choosing between a lottery and a certain amount on behalf of another subject
who responds after the outcome of the choice is revealed. We find that lottery
outcomes and not actions or intentions are important in determining the nature
of the responses. We investigate a form of fairness termed the Control Principle
which asserts that we should hold others responsible only for the events which they
can control. In our environment first movers cannot control the outcome of the
lottery, yet second movers will assign a higher payment to first movers when the
lottery outcome is favorable. We find that this “unfair” sensitivity to outcomes is
cut in half when second mover responses are elicited contingently before the first
mover acts. The pattern of responses in each experimental manipulation can be
rationalized by a framework that first considers what is termed as a salient pertur-
bation of a decision environment (Myerson 1991) and then applies principal-agent
theory to the perturbed environment.
In Chapter 2 we apply the ideas developed in Chapter 1 to data generated in
an experimental environment we call the “voting game”. In the voting game individuals
make a decisions in the context of a group where the payoffs are perfectly
correlated. In this context we find that individuals make fewer risky decisions in
the context of a group when it is salient that the choice is attributable to them. The
data cannot be rationalized by a popular model of social decision theory (Eliaz, Ray, and Razin 2006). The data can be explained by incorporating well known
experimental results on social norms and our results on accountability judgments
from Chapter 1.
In Chapter 3 we investigate important gender differences in risk-taking and
accountability judgments. We find that women are more risk-averse than men and
tend to hold others accountable according to an absolute measure of performance.
Men on the other hand tend to hold others accountable according to benchmarks
less related to performance.
Description
University of Minnesota Ph.D. dissertation. August 2009. Major: Economics. Advisor: Aldo Rustichini. 1 computer file (PDF);viii, 104 pages, appendices A-C.
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Miller, Joshua B.. (2011). Essays on decision making in social environments.. Retrieved from the University Digital Conservancy, https://hdl.handle.net/11299/116183.
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