Behavioral-Economic Phenomena in Group Decisions and Decisions for Others

Awarded Scholars:
John Ifcher, Santa Clara University
Homa Zarghamee, Barnard College
Jeremy Shapiro, Princeton University
Project Date:
Mar 2016
Award Amount:
Project Programs:
Behavioral Economics

Many economists now recognize that—in contravention of neo-classical models—individuals are not exclusively self-interested; that is, they have "social preferences." Social-preference research has mainly examined how others’ outcomes influence decisions made on behalf of oneself. Substantially less attention has been focused on economic decisions that are taken on behalf of others or as groups. Yet, many decisions are made on behalf of others or by a group: elected officials, trustees, boards, consultants, and advisers routinely make decisions with the interests of constituents, clients, or shareholders in mind; grandparents gift savings bonds; spouses plan retirement savings together; and friends offer career and relationship advice. While it is hard to estimate the proportion of resources that is allocated by decisions for others or by group decisions, it is likely that the proportion is substantial and that such decisions have an impact on individual and social welfare.

Economists John Ifcher, Homa Zarghamee and Jeremy Shapiro will examine the discrepancies between individuals making decisions on behalf of themselves, on behalf of others, and on behalf of groups. They will use an 18-item experimental instrument to explore whether individuals want others to make different decisions for them than they would make for themselves; whether the delegation of decisions to others can improve individuals' welfare; and whether individuals tend to make decisions for others according to what they think others want.


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