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Rituals of Reason

Author

Listed:
  • Elias Bouacida
  • Renaud Foucart

Abstract

We study revealed preferences towards the use of random procedures in allocation mechanisms. We report the results of an experiment in which subjects vote on a procedure to allocate a reward to half of them. The first possibility is an explicitly random device: the result of a lottery. The second is either an unpredictable procedure they could interpret as meritocratic, or one that is obviously arbitrary. We run all treatments with and without control. We identify an aversion to lotteries and clearly arbitrary procedures across treatments, even though, on aggregate, subjects do not believe any procedure to give them a higher probability of success and there is no correlation between beliefs and outcomes. In line with the literature, we also find evidence of a control premium in most procedures.

Suggested Citation

  • Elias Bouacida & Renaud Foucart, 2022. "Rituals of Reason," Working Papers 344119591, Lancaster University Management School, Economics Department.
    • Handle: RePEc:lan:wpaper:344119591
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    More about this item

    Keywords

    lotteries; mechanism design; allocation problems; procedures; tiebreaking rule;
    All these keywords.

    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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