Distributional Preferences and Sorting into Decision-Making

In social contexts, making decisions on behalf of a group is a task with which people are often faced in their daily lives. These decisions can range from choosing a holiday plan for your family to making an investment decision for your company where individual preferences determine the payoff distribution for group members. In the holiday example above, some people may follow their own holiday plan, whilst some may self-sacrifice to adapt the preferences of others. Nevertheless, there may also be some people who would prefer refraining from deciding on behalf of a group and leave it to someone else even when they are offered the role. Considering the possible decision problems, such a delegation strategy might be beneficial for payoff maximisation in some cases, while it might reduce the payoff in others. When subjects are not given the option of sorting between different economic environments, then previous experiments not allowing sorting would overestimate the impact of distributional preferences. This book experimentally studies the relationship between distributional preferences and willingness to decide in 2-person groups while focusing on sorting into decision-making.