Flipping a Coin: Theory and Evidence

Nadja Dwenger

Max Planck Institute for Tax Law and Public Finance

Dorothea Kübler

Social Science Research Center (WZB); Technische Universität Berlin (TU Berlin) - Faculty of Economics and Management; Institute for the Study of Labor (IZA)

Georg Weizsacker

Humboldt University Berlin; DIW Berlin

November 12, 2013

We investigate the possibility that a decision-maker prefers to avoid making a decision and instead delegates it to an external device, e.g., a coin flip. In a series of experiments the participants often choose lotteries between allocations, which contradicts most theories of choice such as expected utility but is consistent with a theory of responsibility aversion that implies a preference for randomness. A large data set on university applications in Germany shows a choice pattern that is also consistent with this theory and entails substantial allocative consequences.

Number of Pages in PDF File: 44

Keywords: preference for randomization, menu-dependent preference, individual decision making, university choice, matching

JEL Classification: D03, D01

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Date posted: November 12, 2013  

Suggested Citation

Dwenger, Nadja and Kübler, Dorothea and Weizsacker, Georg, Flipping a Coin: Theory and Evidence (November 12, 2013). Available at SSRN: http://ssrn.com/abstract=2353282 or http://dx.doi.org/10.2139/ssrn.2353282

Contact Information

Nadja Dwenger
Max Planck Institute for Tax Law and Public Finance ( email )
HOME PAGE: http://www.tax.mpg.de/en/pub/public_economics/public_economics_people/dwenger_nadja.cfm
Dorothea F. Kübler
Social Science Research Center (WZB) ( email )
Reichpietschufer 50
D-10785 Berlin, 10785
40 30 25491440 (Phone)
HOME PAGE: http://www.wzb.eu/mp/vam/people/dorothea_kuebler.de.htm
Technical University of Berlin - Faculty of Economics and Management ( email )
D-10623 Berlin
+49 30 31425263 (Phone)
HOME PAGE: http://www.wiwi-experimente.tu-berlin.de/
Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072
Georg Weizsacker (Contact Author)
Humboldt University Berlin ( email )
Spandauer Str. 1
Berlin, D-10099
DIW Berlin
Mohrenstr. 58
Feedback to SSRN

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