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The acceptability of lotteries in allocation problems

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  • Elias Bouacida
  • Renaud Foucart

Abstract

We report the results of two experiments on the social acceptability of random devices in allocation mechanisms. A majority of subjects do not opt for a lottery if they can rationalize an alternative mechanism as non-random. It is, however, possible to design a payoff-equivalent mechanism to the lottery that is more acceptable. Our results shed light on the real-world reliance on obscure criteria in allocation problems where lotteries seem to be simpler and more efficient.

Suggested Citation

  • Elias Bouacida & Renaud Foucart, 2020. "The acceptability of lotteries in allocation problems," Working Papers 301646245, Lancaster University Management School, Economics Department.
    • Handle: RePEc:lan:wpaper:301646245
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    1. Elias Bouacida & Renaud Foucart, 2022. "Rituals of Reason," Working Papers 344119591, Lancaster University Management School, Economics Department.

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    More about this item

    Keywords

    lotteries; mechanism design;

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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