Not logged in.
Quick Search - Contribution
Contribution Details
| Type | Master's Thesis |
| Scope | Discipline-based scholarship |
| Title | Endogenous Authority: Design and Analysis of a Laboratory Experiment |
| Organization Unit | |
| Authors |
|
| Supervisors |
|
| Language |
|
| Institution | University of Zurich |
| Faculty | Faculty of Economics, Business Administration and Information Technology |
| Number of Pages | 58 |
| Date | 2011 |
| Abstract Text | In this paper, we document the realization and analysis of an experiment designed by Fehr et al. [2010] which studies the role of di fferent types of authorities in improving coordination within small groups. We find that in a minimum coordination game without communication, adding an authority that recommends contributions significantly improves coordination. The existence of an authority is more important than the bindingness of recommendations. On average, democratically elected authorities do not perform as well as random authorities regardless of their degree of formal power. Formality via the endowment of a dismissal mechanism is generally used to enforce recommendations, but only democratic authorities also use it for the purpose of prevention or personal amusement, which constitutes an abuse of power. An explanation for these results is that there can be a relatively large probability of dissatisfaction from election results in small groups. Subjects show a strong preference for authorities with a low degree of risk aversion, who as a consequence choose large initial contributions in the minimum coordination game despite maximal uncertainty. As an authority, the first recommendation made as well as trust and trustworthiness is crucial for the quality of future coordination. |
| Export |
BibTeX
|
| Additional Information | Organizational unit at the time of submission: Microeconomics and Experimental Economic Research (Ernst Fehr) |