Illusion of control and the pursuit of authority
We measure participants’ willingness to pay for transparently useless authority—the right to make a completely uninformed task decision. We further elicit participants’ beliefs about receiving their preferred outcome if they make the decision themselves, and if another participant makes the decision for them. We find that participants pay more to make the decision themselves if they also believe that they can thus increase the probability of getting their preferred outcome. Illusion of control therefore exists in a controlled laboratory environment with monetary incentives and is connected to peoples’ pursuit of authority.
KeywordsControl preferences Illusion of control Allocation of decision rights
JEL ClassificationC91 D23 D80
We are very grateful to Thomas Buser, Holger Herz, Joep Sonnemans, Jeroen van de Ven, and Joël van der Weele for very helpful comments. We thank David Cooper, Charles Noussair, and two anonymous referees for their very valuable suggestions that greatly improved our experimental design and the paper in general.
- Bolton, P., & Dewatripont, M. (2013). Authority in organizations. In R. Gibbons & J. Roberts (Eds.), Handboook of organizational economics (pp. 342–372). Princeton: Princeton University Press.Google Scholar
- Owens, D., Grossman, Z., & Fackler, R. (2014). The control premium: A preference for payoff autonomy. American Economic Journal: Microeconomics, 6(4), 138–161.Google Scholar