IDEAS home Printed from https://ideas.repec.org/p/zur/iewwpx/129.html
   My bibliography  Save this paper

Introducing Procedural Utility: Not only What, but also How Matters

Author

Listed:
  • Bruno S. Frey
  • Matthias Benz
  • Alois Stutzer

Abstract

People not only care about outcomes, they also value the procedures which lead to the outcomes. Procedural utility is a potentially important source of human well-being. This paper aims at introducing the concept of procedural utility into economics, and argues that it should be incorporated more widely into economic theory and empirical research. Three building blocks of a concept of procedural utility are outlined and it is suggested how procedural utility can be fruitfully integrated. Evidence from a broad range of social sciences is reviewed in order to show that procedural utility is a relevant concept for economics.

Suggested Citation

  • Bruno S. Frey & Matthias Benz & Alois Stutzer, "undated". "Introducing Procedural Utility: Not only What, but also How Matters," IEW - Working Papers 129, Institute for Empirical Research in Economics - University of Zurich.
  • Handle: RePEc:zur:iewwpx:129
    as

    Download full text from publisher

    File URL: https://www.zora.uzh.ch/id/eprint/52028/1/iewwp129.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Daniel Kahneman & Peter P. Wakker & Rakesh Sarin, 1997. "Back to Bentham? Explorations of Experienced Utility," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 375-406.
    2. Konow, James, 2001. "Fair and square: the four sides of distributive justice," Journal of Economic Behavior & Organization, Elsevier, vol. 46(2), pages 137-164, October.
    3. Anand, Paul, 2001. "Procedural fairness in economic and social choice: Evidence from a survey of voters," Journal of Economic Psychology, Elsevier, vol. 22(2), pages 247-270, April.
    4. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(3), pages 817-868.
    5. Bruno S. Frey & Alois Stutzer, 2005. "Beyond outcomes: measuring procedural utility," Oxford Economic Papers, Oxford University Press, vol. 57(1), pages 90-111, January.
    6. Falk, Armin & Fischbacher, Urs, 2006. "A theory of reciprocity," Games and Economic Behavior, Elsevier, vol. 54(2), pages 293-315, February.
    7. Frey, Bruno S & Oberholzer-Gee, Felix, 1997. "The Cost of Price Incentives: An Empirical Analysis of Motivation Crowding-Out," American Economic Review, American Economic Association, vol. 87(4), pages 746-755, September.
    8. Oswald, Andrew J, 1997. "Happiness and Economic Performance," Economic Journal, Royal Economic Society, vol. 107(445), pages 1815-1831, November.
    9. Akerlof, George A & Dickens, William T, 1982. "The Economic Consequences of Cognitive Dissonance," American Economic Review, American Economic Association, vol. 72(3), pages 307-319, June.
    10. Kunreuther, Howard & Kleindorfer, Paul R, 1986. "A Sealed-Bid Auction Mechanism for Siting Noxious Facilities," American Economic Review, American Economic Association, vol. 76(2), pages 295-299, May.
    11. Lars P. Feld & Bruno S. Frey, 2002. "Trust breeds trust: How taxpayers are treated," Economics of Governance, Springer, vol. 3(2), pages 87-99, July.
    12. Blanchflower, David G & Oswald, Andrew J, 1998. "What Makes an Entrepreneur?," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 26-60, January.
    13. Alesina, Alberto & Di Tella, Rafael & MacCulloch, Robert, 2004. "Inequality and happiness: are Europeans and Americans different?," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 2009-2042, August.
    14. Slemrod, Joel & Yitzhaki, Shlomo, 2002. "Tax avoidance, evasion, and administration," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 22, pages 1423-1470, Elsevier.
    15. George A. Akerlof & Rachel E. Kranton, 2000. "Economics and Identity," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 715-753.
    16. O'Sullivan Arthur, 1993. "Voluntary Auctions for Noxious Facilities: Incentives to Participate and the Efficiency of Siting Decisions," Journal of Environmental Economics and Management, Elsevier, vol. 25(1), pages 12-26, July.
    17. Tom R. Tyler, 1997. "Procedural Fairness and Compliance with the Law," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 133(II), pages 219-240, June.
    18. Felix Oberholzer-Gee & Bruno S. Frey & Albert Hart & Werner W. Pommerehne, 1995. "Panik, Protest und Paralyse Eine empirische Untersuchung über nukleare Endlager in der Schweiz," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 131(II), pages 147-177, June.
    19. James Andreoni & Brian Erard & Jonathan Feinstein, 1998. "Tax Compliance," Journal of Economic Literature, American Economic Association, vol. 36(2), pages 818-860, June.
    20. Alesina, Alberto & La Ferrara, Eliana, 2005. "Preferences for redistribution in the land of opportunities," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 897-931, June.
    21. Robert MacCulloch & Silvia Pezzini, 2010. "The Roles of Freedom, Growth, and Religion in the Taste for Revolution," Journal of Law and Economics, University of Chicago Press, vol. 53(2), pages 329-358, May.
    22. Shiller, Robert J & Boycko, Maxim & Korobov, Vladimir, 1991. "Popular Attitudes toward Free Markets: The Soviet Union and the United States Compared," American Economic Review, American Economic Association, vol. 81(3), pages 385-400, June.
    23. Bruno S. Frey, 1997. "Not Just for the Money," Books, Edward Elgar Publishing, number 1183.
    24. Alm, James & McClelland, Gary H. & Schulze, William D., 1992. "Why do people pay taxes?," Journal of Public Economics, Elsevier, vol. 48(1), pages 21-38, June.
    25. Pommerehne, Werner W & Weck-Hannemann, Hannelore, 1996. "Tax Rates, Tax Administration and Income Tax Evasion in Switzerland," Public Choice, Springer, vol. 88(1-2), pages 161-170, July.
    26. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
    27. Matthias Benz & Bruno S. Frey, 2008. "Being Independent is a Great Thing: Subjective Evaluations of Self‐Employment and Hierarchy," Economica, London School of Economics and Political Science, vol. 75(298), pages 362-383, May.
    28. Bruno S. Frey & Lars P. Feld, 2002. "Deterrence and Morale in Taxation: An Empirical Analysis," CESifo Working Paper Series 760, CESifo.
    29. Falk, Armin & Fehr, Ernst & Fischbacher, Urs, 2008. "Testing theories of fairness--Intentions matter," Games and Economic Behavior, Elsevier, vol. 62(1), pages 287-303, January.
    30. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard, 1986. "Fairness as a Constraint on Profit Seeking: Entitlements in the Market," American Economic Review, American Economic Association, vol. 76(4), pages 728-741, September.
    31. Marc Le Menestrel, 2001. "A Process Approach to the Utility for Gambling," Theory and Decision, Springer, vol. 50(3), pages 249-262, May.
    32. David Blanchflower & A Oswald, 1993. "Entrepreneurship," CEP Discussion Papers dp0134, Centre for Economic Performance, LSE.
    33. Blanchflower, David G. & Oswald, Andrew & Stutzer, Alois, 2001. "Latent entrepreneurship across nations," European Economic Review, Elsevier, vol. 45(4-6), pages 680-691, May.
    34. repec:bla:kyklos:v:52:y:1999:i:3:p:315-43 is not listed on IDEAS
    35. Mueller, Dennis C., 1978. "Voting by veto," Journal of Public Economics, Elsevier, vol. 10(1), pages 57-75, August.
    36. Michael D. Intriligator, 1973. "A Probabilistic Model of Social Choice," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 40(4), pages 553-560.
    37. Fong, Christina, 2001. "Social preferences, self-interest, and the demand for redistribution," Journal of Public Economics, Elsevier, vol. 82(2), pages 225-246, November.
    38. Khalil, Elias L., 1996. "Respect, admiration, aggrandizement: Adam Smith as economic psychologist," Journal of Economic Psychology, Elsevier, vol. 17(5), pages 555-577, November.
    39. Edward P. Lazear, 2000. "Economic Imperialism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(1), pages 99-146.
    40. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December.
    41. Lea, Stephen E. G. & Webley, Paul, 1997. "Pride in economic psychology," Journal of Economic Psychology, Elsevier, vol. 18(2-3), pages 323-340, April.
    42. Sen, Amartya, 1995. "Rationality and Social Choice," American Economic Review, American Economic Association, vol. 85(1), pages 1-24, March.
    43. Frey, Bruno S. & Pommerehne, Werner W., 1993. "On the fairness of pricing -- An empirical survey among the general population," Journal of Economic Behavior & Organization, Elsevier, vol. 20(3), pages 295-307, April.
    44. Jean-Robert Tyran & Dirk Engelmann, 2002. "To Buy or Not to Buy? An Experimental Study of Consumer Boycotts in Retail Markets," University of St. Gallen Department of Economics working paper series 2002 2002-13, Department of Economics, University of St. Gallen.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Matthias Benz & Bruno S. Frey, 2008. "Being Independent is a Great Thing: Subjective Evaluations of Self‐Employment and Hierarchy," Economica, London School of Economics and Political Science, vol. 75(298), pages 362-383, May.
    2. James Alm, 2019. "What Motivates Tax Compliance?," Journal of Economic Surveys, Wiley Blackwell, vol. 33(2), pages 353-388, April.
    3. Bruno S. Frey & Stephan Meier, "undated". "Pro-Social Behavior, Reciprocity or Both?," IEW - Working Papers 107, Institute for Empirical Research in Economics - University of Zurich.
    4. Philipp Doerrenberg & Andreas Peichl, 2013. "Progressive taxation and tax morale," Public Choice, Springer, vol. 155(3), pages 293-316, June.
    5. Djanali, Iwan & Sheehan-Connor, Damien, 2012. "Tax affinity hypothesis: Do we really hate paying taxes?," Journal of Economic Psychology, Elsevier, vol. 33(4), pages 758-775.
    6. Frey, Bruno S. & Meier, Stephan, 2004. "Pro-social behavior in a natural setting," Journal of Economic Behavior & Organization, Elsevier, vol. 54(1), pages 65-88, May.
    7. Matthias Benz & Alois Stutzer, "undated". "Do Workers Enjoy Procedural Utility?," IEW - Working Papers 127, Institute for Empirical Research in Economics - University of Zurich.
    8. James Konow, 2003. "Which Is the Fairest One of All? A Positive Analysis of Justice Theories," Journal of Economic Literature, American Economic Association, vol. 41(4), pages 1188-1239, December.
    9. Torgler, Benno & Schneider, Friedrich & Schaltegger, Christoph A., 2007. "With or Against the People? The Impact of a Bottom-Up Approach on Tax Morale and the Shadow Economy," Berkeley Olin Program in Law & Economics, Working Paper Series qt6331x6vz, Berkeley Olin Program in Law & Economics.
    10. Lelkes, Orsolya, 2006. "Tasting freedom: Happiness, religion and economic transition," Journal of Economic Behavior & Organization, Elsevier, vol. 59(2), pages 173-194, February.
    11. Grimalday, Gianluca & Karz, Anirban & Proto, Eugenio, 2012. "Everyone Wants a Chance: Initial Positions and Fairness in Ultimatum Games," CAGE Online Working Paper Series 93, Competitive Advantage in the Global Economy (CAGE).
    12. Rebitzer, James B. & Taylor, Lowell J., 2011. "Extrinsic Rewards and Intrinsic Motives: Standard and Behavioral Approaches to Agency and Labor Markets," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 8, pages 701-772, Elsevier.
    13. Torgler, Benno & Schneider, Friedrich, 2007. "Shadow Economy, Tax Morale, Governance and Institutional Quality: A Panel Analysis," Berkeley Olin Program in Law & Economics, Working Paper Series qt26s710z8, Berkeley Olin Program in Law & Economics.
    14. Bierbrauer, Felix & Netzer, Nick, 2016. "Mechanism design and intentions," Journal of Economic Theory, Elsevier, vol. 163(C), pages 557-603.
    15. Bartling Björn & Grieder Manuel & Zehnder Christian, 2014. "Does competition justify inequality?," ECON - Working Papers 158, Department of Economics - University of Zurich, revised Nov 2015.
    16. Matteo Cervellati & Joan-Maria Esteban & Laurence Kranich, 2010. "Work Values, Endogenous Sentiments and Redistribution," Working Papers 434, Barcelona School of Economics.
    17. Hahn, Volker & Mühe, Felix, 2009. "Committees and reciprocity," Mathematical Social Sciences, Elsevier, vol. 57(1), pages 26-47, January.
    18. Benno Torgler & Friedrich Schneider & Christoph Schaltegger, 2010. "Local autonomy, tax morale, and the shadow economy," Public Choice, Springer, vol. 144(1), pages 293-321, July.
    19. Benno Torgler & Friedrich Schneider & Christoph Schaltegger, 2010. "Local autonomy, tax morale, and the shadow economy," Public Choice, Springer, vol. 144(1), pages 293-321, July.
    20. Fehr, Ernst & Schmidt, Klaus M., 2005. "The Economics of Fairness, Reciprocity and Altruism – Experimental Evidence and New Theories," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 66, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.

    More about this item

    Keywords

    procedural utility; outcome utility; institutions Growth Optimal Portfolio.;
    All these keywords.

    JEL classification:

    • A00 - General Economics and Teaching - - General - - - General
    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • D60 - Microeconomics - - Welfare Economics - - - General
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zur:iewwpx:129. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Severin Oswald (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.