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Intention and Stochastic Outcomes: An Experimental Study

Gary Charness
University of California, Santa Barbara - Department of Economics

David I. Levine
University of California, Berkeley - Economic Analysis & Policy Group

Economic Journal, Vol. 117, No. 522, pp. 1051-1072, July 2007

Abstract:
Do people care about intentions even when good intentions do not produce good results? In our experiments we find that rates of punishment and reward react strongly to intentions (the wage a firm decides to pay) and more modestly to distributional outcomes (the higher or lower wage actually received including the stochastic component). For example, workers who end up receiving medium wages respond much more positively when this resulted from the firm offering a high wage but bad luck lowered the worker's pay than when this resulted from the firm offering a low wage and good luck raised the pay.

Accepted Paper Series

Date posted: July 08, 2007 ; Last revised: July 08, 2007

Suggested Citation

Charness, Gary and Levine, David I. Ian, Intention and Stochastic Outcomes: An Experimental Study. Economic Journal, Vol. 117, No. 522, pp. 1051-1072, July 2007. Available at SSRN: http://ssrn.com/abstract=998151 or doi:10.1111/j.1468-0297.2007.02066.x

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Contact Information

Gary Charness (Contact Author) University of California, Santa Barbara - Department of Economics ( email ) 2127 North Hall Santa Barbara, CA 93106 United States 805-893-2412 (Phone) 805-893-8830 (Fax)
David Ian Levine University of California, Berkeley - Economic Analysis & Policy Group ( email ) Berkeley, CA 94720 United States 510-642-1697 (Phone) 510-643-1420 (Fax)