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Strategic Social Preferences: Making Rational Political Decisions for Others

Sun, September 1, 10:00 to 11:30am, Hilton, Tenleytown East

Abstract

Politics often involves making decisions on behalf of others. For instance, in the United States large-scale natural disasters are more concentrated in some regions than others. Yet federal responses are (indirectly) determined by the decisions of citizens throughout the country. Will citizens who are unlikely to be affected make useful or rational decisions on behalf of others? Classic models that assume citizens are narrowly self-interested suggest they will not. More recent models suggest otherwise. These models focus on social preferences, the willingness of people to pay personal costs to benefit others. Past work has, for example, examined social preferences in motivating political activity. We extend this by using an experiment to ask not just whether people will pay a cost on behalf of others, but whether they will do so in a way that is strategically useful. Our experiment uses a modified public goods game designed to simulate mitigating natural disasters. Players work in 4-person groups and each player begins with a personal pot of money they can choose to invest to prevent disaster. Players can choose to invest in a low-risk, low-yield prevention technology or a high-risk, high-yield technology. Importantly, players’ investments do not affect their own group; one group’s investments will benefit a different, unrelated group. As a between-subjects manipulation we vary the amount of money needed to prevent disaster. As the amount needed rises, the strategically useful investment changes, from low-risk investment in low need to high-risk in high need. Do players making decisions on behalf of others respond to this strategic element? We find that they do: Players not only pay personal costs to benefit other groups but do so in the strategically useful way, making risky but higher-yield investments under higher need. Our experiment suggests social preferences can lead to rational political decisions on behalf of others.

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