Preferences Over Decision-making Procedures in Income Redistribution

• In Event: Formal Political Economy

Abstract

What determines individuals’ preferences over alternative decision-making procedures – the potential gain from these or the intrinsic value assigned to them? This study tests an income redistribution game in which subjects can endogenously determine whether to decide upon redistribution by majority voting or by lot. Subjects are randomly assigned to groups of three, receiving a random endowment. The sum of endowments is common knowledge. Subjects choose either to redistribute endowments equally or to maintain the original allocation after they have chosen the decision procedure (majority voting or lot). We find that although the share of rational egoistic procedural choices increases when the distribution of endowments is common knowledge, compared to a situation in which subjects only know their own endowment, a substantive share of subjects reveals a persistent preference for majority voting. Support for majority voting is the strongest when the common knowledge condition is combined with a chat option. These preliminary findings suggest that majority voting is not just a normative default when the rational egoistic procedural choice is limited by a lack of information, but also that support for majority voting is promoted through communication, even if it is costly.

Authors

• Markus Stephan Tepe, Carl von Ossietzky Universität Oldenburg

• Claudia Landwehr, Johannes Gutenberg University Mainz