By Chance or by Choice? Biased Attribution of Others' Outcomes when Social Preferences Matter

90 Pages Posted: 11 Oct 2018 Last revised: 12 Mar 2021

See all articles by Nisvan Erkal

Nisvan Erkal

University of Melbourne - Faculty of Business and Economics

Lata Gangadharan

Monash University

Boon Han Koh

University of East Anglia (UEA) - School of Economics

Date Written: March 8, 2021

Abstract

Decision makers in positions of power often make unobserved choices under risk and uncertainty. In many cases, they face a trade-off between maximizing their own payoff and those of other individuals. What inferences are made in such instances about their choices when only outcomes are observable? We report findings from two experiments that investigate whether outcomes are attributed to luck or choices. We show that attribution biases exist in the evaluation of good outcomes. On average, good outcomes of decision makers are attributed more to luck as compared to bad outcomes. This asymmetry implies that decision makers get too little credit for their successes. Interestingly, the biases are exhibited by those individuals who make or would make the less prosocial choice for the group as decision makers, suggesting that a consensus effect may be shaping both the belief formation and updating processes.

Keywords: Decision-making under risk; Beliefs about others' decisions; Attribution biases; Social preferences; Consensus effect; Experiments

JEL Classification: C92, D91, D81

Suggested Citation

Erkal, Nisvan and Gangadharan, Lata and Koh, Boon Han, By Chance or by Choice? Biased Attribution of Others' Outcomes when Social Preferences Matter (March 8, 2021). Available at SSRN: https://ssrn.com/abstract=3251105 or http://dx.doi.org/10.2139/ssrn.3251105

Nisvan Erkal (Contact Author)

University of Melbourne - Faculty of Business and Economics ( email )

Victoria, 3010
Australia
+61 3 8344 3307 (Phone)
+61 3 8344 6899 (Fax)

HOME PAGE: http://www.nisvanerkal.net

Lata Gangadharan

Monash University ( email )

23 Innovation Walk
Wellington Road
Clayton, Victoria 3800
Australia

Boon Han Koh

University of East Anglia (UEA) - School of Economics ( email )

3.06, Registry
University of East Anglia
Norwich, NR4 7TJ
United Kingdom

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