Nothing Special   »   [go: up one dir, main page]

IDEAS home Printed from https://ideas.repec.org/p/mlb/wpaper/2040.html
   My bibliography  Save this paper

By chance or by choice? Biased attribution of others’ outcomes

Author

Listed:
Abstract
Decision makers in positions of power often make unobserved choices under risk and uncertainty. What inferences are made about their choices when only outcomes are observed? Using a laboratory experiment, we investigate attribution biases in the evaluation of outcomes. Decision makers face a trade-off between maximizing their own payoff and those of other individuals. We show that attribution biases exist in the evaluation of good outcomes and decision makers receive too little credit for their successes. Importantly, the biases tend to be driven by subjects who make the selfish choice themselves when placed in the role of the decision maker.

Suggested Citation

  • Nisvan Erkal & Lata Gangadharan & Boon Han Koh, 2018. "By chance or by choice? Biased attribution of others’ outcomes," Department of Economics - Working Papers Series 2040, The University of Melbourne.
  • Handle: RePEc:mlb:wpaper:2040
    as

    Download full text from publisher

    File URL: https://fbe.unimelb.edu.au/__data/assets/pdf_file/0010/2888884/2040_Boon-and-Nisvan_LeadershipEL-draft.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jordi Brandts & David J. Cooper & Roberto A. Weber, 2015. "Legitimacy, Communication, and Leadership in the Turnaround Game," Management Science, INFORMS, vol. 61(11), pages 2627-2645, November.
    2. Uri Gneezy & Jan Potters, 1997. "An Experiment on Risk Taking and Evaluation Periods," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 631-645.
    3. John T. Kulas & Mana Komai & Saint Cloud State University & Philip J. Grossman, 2013. "Leadership, Information, and Risk Attitude: A Game Theoretic Approach," Monash Economics Working Papers 30-13, Monash University, Department of Economics.
    4. Ben Greiner, 2015. "Subject pool recruitment procedures: organizing experiments with ORSEE," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 1(1), pages 114-125, July.
    5. Alexander W. Cappelen & James Konow & Erik ?. S?rensen & Bertil Tungodden, 2013. "Just Luck: An Experimental Study of Risk-Taking and Fairness," American Economic Review, American Economic Association, vol. 103(4), pages 1398-1413, June.
    6. Kai Barron, 2021. "Belief updating: does the ‘good-news, bad-news’ asymmetry extend to purely financial domains?," Experimental Economics, Springer;Economic Science Association, vol. 24(1), pages 31-58, March.
    7. Alberto Alesina & George-Marios Angeletos, 2005. "Fairness and Redistribution," American Economic Review, American Economic Association, vol. 95(4), pages 960-980, September.
    8. Cole, Shawn & Healy, Andrew & Werker, Eric, 2012. "Do voters demand responsive governments? Evidence from Indian disaster relief," Journal of Development Economics, Elsevier, vol. 97(2), pages 167-181.
    9. Grossman, Zachary & Owens, David, 2012. "An unlucky feeling: Overconfidence and noisy feedback," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 510-524.
    10. Alexander Coutts, 2019. "Good news and bad news are still news: experimental evidence on belief updating," Experimental Economics, Springer;Economic Science Association, vol. 22(2), pages 369-395, June.
    11. Tanjim Hossain & Ryo Okui, 2013. "The Binarized Scoring Rule," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(3), pages 984-1001.
    12. Gauriot, Romain & Page, Lionel, 2018. "Fooled by randomness: over-rewarding luck," Working Papers 2018-03, University of Sydney, School of Economics.
    13. Mehmet Y. Gurdal & Joshua B. Miller & Aldo Rustichini, 2013. "Why Blame?," Journal of Political Economy, University of Chicago Press, vol. 121(6), pages 1205-1247.
      • Gurdal, Mehmet Y. & Miller, Joshua Benjamin & Rustichini, Aldo, 2013. "Why Blame?," OSF Preprints g9j48, Center for Open Science.
      • Mehmet Gurdal & Joshua B. Miller & Aldo Rustichini, 2013. "Why Blame?," Working Papers 494, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
      • Gurdal, Mehmet & Miller, Joshua B. & Rustichini, Aldo, 2013. "Why Blame?," Economic Research Papers 270437, University of Warwick - Department of Economics.
      • Gurdal, Mehmet & Miller, Joshua B. & Rustichini, Aldo, 2013. "Why Blame?," CAGE Online Working Paper Series 158, Competitive Advantage in the Global Economy (CAGE).
    14. Grossman, Philip J. & Eckel, Catherine & Komai, Mana & Zhan, Wei, 2019. "It pays to be a man: Rewards for leaders in a coordination game," Journal of Economic Behavior & Organization, Elsevier, vol. 161(C), pages 197-215.
    15. Ertac, Seda & Gurdal, Mehmet Y., 2012. "Deciding to decide: Gender, leadership and risk-taking in groups," Journal of Economic Behavior & Organization, Elsevier, vol. 83(1), pages 24-30.
    16. Galeotti, Fabio & Zizzo, Daniel John, 2018. "Identifying voter preferences: The trade-off between honesty and competence," European Economic Review, Elsevier, vol. 105(C), pages 27-50.
    17. David M. Grether, 1980. "Bayes Rule as a Descriptive Model: The Representativeness Heuristic," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 95(3), pages 537-557.
    18. Simon Gächter & Daniele Nosenzo & Elke Renner & Martin Sefton, 2012. "Who Makes A Good Leader? Cooperativeness, Optimism, And Leading-By-Example," Economic Inquiry, Western Economic Association International, vol. 50(4), pages 953-967, October.
    19. Price, Paul C., 1998. "Effects of a Relative-Frequency Elicitation Question on Likelihood Judgment Accuracy: The Case of External Correspondence, , , , ," Organizational Behavior and Human Decision Processes, Elsevier, vol. 76(3), pages 277-297, December.
    20. Xuan Tian & Tracy Yue Wang, 2014. "Tolerance for Failure and Corporate Innovation," The Review of Financial Studies, Society for Financial Studies, vol. 27(1), pages 211-255, January.
    21. Thomas Buser & Leonie Gerhards & Joël Weele, 2018. "Responsiveness to feedback as a personal trait," Journal of Risk and Uncertainty, Springer, vol. 56(2), pages 165-192, April.
    22. Matthew Rabin, 1998. "Psychology and Economics," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 11-46, March.
    23. Dirk Engelmann & Martin Strobel, 2000. "The False Consensus Effect Disappears if Representative Information and Monetary Incentives Are Given," Experimental Economics, Springer;Economic Science Association, vol. 3(3), pages 241-260, December.
    24. John R. Hamman & Roberto A. Weber & Jonathan Woon, 2011. "An Experimental Investigation of Electoral Delegation and the Provision of Public Goods," American Journal of Political Science, John Wiley & Sons, vol. 55(4), pages 738-752, October.
    25. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    26. Pedro Rey-Biel & Roman Sheremeta & Neslihan Uler, 2018. "When Income Depends on Performance and Luck: The Effects of Culture and Information on Giving," Research in Experimental Economics, in: Experimental Economics and Culture, volume 20, pages 167-203, Emerald Group Publishing Limited.
    27. Romain Gauriot & Lionel Page, 2019. "Fooled by Performance Randomness: Overrewarding Luck," The Review of Economics and Statistics, MIT Press, vol. 101(4), pages 658-666, October.
    28. Ambuehl, Sandro & Li, Shengwu, 2018. "Belief updating and the demand for information," Games and Economic Behavior, Elsevier, vol. 109(C), pages 21-39.
    29. Karl Schlag & James Tremewan & Joël Weele, 2015. "A penny for your thoughts: a survey of methods for eliciting beliefs," Experimental Economics, Springer;Economic Science Association, vol. 18(3), pages 457-490, September.
    30. David Eil & Justin M. Rao, 2011. "The Good News-Bad News Effect: Asymmetric Processing of Objective Information about Yourself," American Economic Journal: Microeconomics, American Economic Association, vol. 3(2), pages 114-138, May.
    31. Leone, Andrew J. & Wu, Joanna Shuang & Zimmerman, Jerold L., 2006. "Asymmetric sensitivity of CEO cash compensation to stock returns," Journal of Accounting and Economics, Elsevier, vol. 42(1-2), pages 167-192, October.
    32. Julio J. Rotemberg, 2014. "Models of Caring, or Acting as if One Cared, About the Welfare of Others," Annual Review of Economics, Annual Reviews, vol. 6(1), pages 129-154, August.
    33. Ertac, Seda, 2011. "Does self-relevance affect information processing? Experimental evidence on the response to performance and non-performance feedback," Journal of Economic Behavior & Organization, Elsevier, vol. 80(3), pages 532-545.
    34. Engelmann, Dirk & Strobel, Martin, 2012. "Deconstruction and reconstruction of an anomaly," Games and Economic Behavior, Elsevier, vol. 76(2), pages 678-689.
    35. Gary Charness & David I. Levine, 2007. "Intention and Stochastic Outcomes: An Experimental study," Economic Journal, Royal Economic Society, vol. 117(522), pages 1051-1072, July.
    36. Matthew Rabin & Joel L. Schrag, 1999. "First Impressions Matter: A Model of Confirmatory Bias," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 37-82.
    37. Marianne Bertrand & Sendhil Mullainathan, 2001. "Are CEOs Rewarded for Luck? The Ones Without Principals Are," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(3), pages 901-932.
    38. Levy, David M. & Padgitt, Kail & Peart, Sandra J. & Houser, Daniel & Xiao, Erte, 2011. "Leadership, cheap talk and really cheap talk," Journal of Economic Behavior & Organization, Elsevier, vol. 77(1), pages 40-52, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. David Danz & Lise Vesterlund & Alistair J. Wilson, 2020. "Belief Elicitation: Limiting Truth Telling with Information on Incentives," NBER Working Papers 27327, National Bureau of Economic Research, Inc.

    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. Nisvan Erkal & Lata Gangadharan & Boon Han Koh, 2022. "By chance or by choice? Biased attribution of others’ outcomes when social preferences matter," Experimental Economics, Springer;Economic Science Association, vol. 25(2), pages 413-443, April.
    2. Nisvan Erkal & Lata Gangadharan & Boon Han Koh, 2021. "Gender Biases in Performance Evaluation: The Role of Beliefs Versus Outcomes," University of East Anglia School of Economics Working Paper Series 2021-09, School of Economics, University of East Anglia, Norwich, UK..
    3. Kai Barron, 2021. "Belief updating: does the ‘good-news, bad-news’ asymmetry extend to purely financial domains?," Experimental Economics, Springer;Economic Science Association, vol. 24(1), pages 31-58, March.
    4. Daniel J. Benjamin, 2018. "Errors in Probabilistic Reasoning and Judgment Biases," NBER Working Papers 25200, National Bureau of Economic Research, Inc.
    5. Erkal, Nisvan & Gangadharan, Lata & Koh, Boon Han, 2023. "Do women receive less blame than men? Attribution of outcomes in a prosocial setting," Journal of Economic Behavior & Organization, Elsevier, vol. 210(C), pages 441-452.
    6. Markus M. Möbius & Muriel Niederle & Paul Niehaus & Tanya S. Rosenblat, 2022. "Managing Self-Confidence: Theory and Experimental Evidence," Management Science, INFORMS, vol. 68(11), pages 7793-7817, November.
    7. Alexander Coutts, 2019. "Good news and bad news are still news: experimental evidence on belief updating," Experimental Economics, Springer;Economic Science Association, vol. 22(2), pages 369-395, June.
    8. Murad, Zahra & Starmer, Chris, 2021. "Confidence snowballing and relative performance feedback," Journal of Economic Behavior & Organization, Elsevier, vol. 190(C), pages 550-572.
    9. Nisvan Erkal & Lata Gangadharan & Boon Han Koh, 2023. "Discrimination in Evaluation Criteria: The Role of Beliefs versus Outcomes," Discussion Papers 2316, University of Exeter, Department of Economics.
    10. Banerjee, Ritwik & Gupta, Nabanita Datta & Villeval, Marie Claire, 2020. "Feedback spillovers across tasks, self-confidence and competitiveness," Games and Economic Behavior, Elsevier, vol. 123(C), pages 127-170.
    11. Castagnetti, Alessandro & Schmacker, Renke, 2022. "Protecting the ego: Motivated information selection and updating," European Economic Review, Elsevier, vol. 142(C).
    12. Coutts, Alexander, 2019. "Testing models of belief bias: An experiment," Games and Economic Behavior, Elsevier, vol. 113(C), pages 549-565.
    13. Thomas Buser & Leonie Gerhards & Joël Weele, 2018. "Responsiveness to feedback as a personal trait," Journal of Risk and Uncertainty, Springer, vol. 56(2), pages 165-192, April.
    14. Brownback, Andy & Kuhn, Michael A., 2019. "Understanding outcome bias," Games and Economic Behavior, Elsevier, vol. 117(C), pages 342-360.
    15. Shimon Kogan & Florian H. Schneider & Roberto A. Weber, 2021. "Self-Serving Biases in Beliefs about Collective Outcomes," CESifo Working Paper Series 8975, CESifo.
    16. Molle, Mana Komai & Grossman, Philip J. & Kulas, John T. & Lo, Siu Pong, 2023. "Does a leader's self-assessed integrity matter?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 104(C).
    17. Thaler, Michael, 2021. "Gender differences in motivated reasoning," Journal of Economic Behavior & Organization, Elsevier, vol. 191(C), pages 501-518.
    18. Cacault, Maria Paula & Grieder, Manuel, 2019. "How group identification distorts beliefs," Journal of Economic Behavior & Organization, Elsevier, vol. 164(C), pages 63-76.
    19. Heger, Stephanie A. & Papageorge, Nicholas W., 2018. "We should totally open a restaurant: How optimism and overconfidence affect beliefs," Journal of Economic Psychology, Elsevier, vol. 67(C), pages 177-190.
    20. Christoph Drobner, 2020. "Motivated Beliefs and Anticipation of Uncertainty Resolution," Munich Papers in Political Economy 07, Munich School of Politics and Public Policy and the School of Management at the Technical University of Munich.

    More about this item

    Keywords

    Beliefs about others’ decisions; Biases; Asymmetric attribution; Social preferences; Experiments;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:mlb:wpaper:2040. 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: Dandapani Lokanathan (email available below). General contact details of provider: https://edirc.repec.org/data/demelau.html .

    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.