The Intrinsic Value of Decision Rights

44 Pages Posted: 6 Jun 2013

See all articles by Björn Bartling

Björn Bartling

University of Zurich - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Ernst Fehr

University of Zurich - Department of Economics

Holger Herz

University of Fribourg - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: May 31, 2013

Abstract

Philosophers, psychologists, and economists have long argued that certain decision rights carry not only instrumental value but may also be valuable for their own sake. The ideas of autonomy, freedom, and liberty derive their intuitive appeal – at least partly – from an assumed positive intrinsic value of decision rights. Proving the existence of this value and measuring its size, however, is intricate. Here, we develop an experimental method capable of achieving these goals. The data reveal that – across different parameterizations – the large majority of our subjects intrinsically value decision rights beyond their instrumental benefit. The existence of an intrinsic value of decision rights helps understand the allocation of decision rights in practice, and it has implications for their optimal allocation in organizations, economic institutions, and society at large.

Keywords: decision rights, intrinsic value, authority

JEL Classification: C910, D030, D230

Suggested Citation

Bartling, Björn and Fehr, Ernst and Herz, Holger, The Intrinsic Value of Decision Rights (May 31, 2013). CESifo Working Paper Series No. 4252, Available at SSRN: https://ssrn.com/abstract=2274618 or http://dx.doi.org/10.2139/ssrn.2274618

Björn Bartling (Contact Author)

University of Zurich - Department of Economics ( email )

Zuerich, 8006
Switzerland

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Ernst Fehr

University of Zurich - Department of Economics ( email )

Blümlisalpstrasse 10
Zuerich, 8006
Switzerland
+41 1 634 3709 (Phone)
+41 1 634 4907 (Fax)

Holger Herz

University of Fribourg - Department of Economics ( email )

Fribourg
Switzerland

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