Flipping a Coin: Theory and Evidence
44 Pages Posted: 12 Nov 2013
Date Written: 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.
Keywords: preference for randomization, menu-dependent preference, individual decision making, university choice, matching
JEL Classification: D03, D01
Suggested Citation: Suggested Citation