Preferences for Power
80 Pages Posted: 28 Aug 2017 Last revised: 8 Jun 2019
Date Written: June 6, 2019
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: Suggested Citation