Preferences for Power

80 Pages Posted: 28 Aug 2017 Last revised: 8 Jun 2019

See all articles by Elena Pikulina

Elena Pikulina

University of British Columbia (UBC) - Division of Finance

Chloe Tergiman

The Pennsylvania State University

Date Written: June 6, 2019

Abstract

Power—the ability to determine the outcomes of others—usually comes with various benefits: higher compensation, public recognition,etc. We develop a new game, the Power Game, and use it to demonstrate that a substantial fraction of individuals enjoy the intrinsic value of power: they accept a lower payoff in exchange for power over others, without any additional benefits to themselves. We show that preferences for power exist independently of other components of decision rights. Further, these preferences cannot be explained by social preferences, are stable over time and are not driven by mistakes, confusion or signaling intentions. Using a series of additional experiments, we show that (i) power is related to determining outcomes of others directly as opposed to simply influencing them; (ii) depends on how much freedom the decision-maker has over deciding those outcomes; (iii) is tied to relationships between individuals and not necessarily organizations; and (iv) likely depends on the domain: power is salient in work-place settings but not necessarily in others. We establish that ignoring preferences for power may have large welfare implications. Consequently, our findings provide strong reasons for incorporating preferences for power in the study of political systems, labor contracts and work relationships.

Keywords: Preferences for power, private benefits of control, social preferences, other-regarding preferences, laboratory experiment

JEL Classification: C91, D01, D03, M21

Suggested Citation

Pikulina, Elena and Tergiman, Chloe, Preferences for Power (June 6, 2019). Available at SSRN: https://ssrn.com/abstract=3025621 or http://dx.doi.org/10.2139/ssrn.3025621

Elena Pikulina (Contact Author)

University of British Columbia (UBC) - Division of Finance ( email )

2053 Main Mall
Vancouver, BC V6T 1Z2
Canada
6048223314 (Phone)

Chloe Tergiman

The Pennsylvania State University ( email )

University Park
State College, PA 16802
United States

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