Confidence, power and distributive preferences

Abstract

The aims of this study were twofold, to: (1) examine the behavior displayed by participants who expected to be nominated for donor roles in dictator games wherein initial endowments of players are determined by lottery and (2) investigate the conduct of donors who were confident in their good fortune in relation to their power as they redistributed the rewards they had gained. Results from a dictator game in which a donor is accorded the absolute power to redistribute initial income and a random dictator game in which both a donor and a recipient declare their redistributive preferences and one of them is selected randomly by a computer were compared. Confident donors made more self-serving redistribution decisions than did unconfident donors in both games, but the difference was clearer in the dictator game. In relation to their preferences exhibited before being informed of their roles, confident donors decreased their redistribution amounts after discovering their roles; the decrements in the dictator game were conspicuously larger than those in the random dictator game. In short, confident donors were greedier than unconfident donors; the difference became more pronounced when their redistributive power was unconditional even though their confidence had no rational basis.

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Fig. 1
Fig. 2

Notes

  1. 1.

    In the recruitment process, I turned down applicants who had previously participated in a similar—or the same—experiment. Eleven other unsuitable participants were identified in the follow-up phase. The original number of participants was 300, but I omitted the data of 11 from the analysis. Detailed information on the number of participants is shown in Table 4 in Appendix A.

  2. 2.

    Instructions appear in Appendix B.

  3. 3.

    I set X = ¥500.

  4. 4.

    The questionnaire list appears in Table 5 in Appendix A.

  5. 5.

    Most experimental procedures of the present study were identical to those of Iida (2015); the exceptions were a) the task that determined participants’ initial income and b) controls regarding donors’ power to redistribute their initial income.

  6. 6.

    In the RDG, there was a possibility that a recipient’s request might have been realized, whereas this was not the case in the DG, so the motivations for revealing the preferences of recipients in both treatments could be different. Results, including both treatments shown here, are just for reference purposes. Separate results are shown in the next section.

  7. 7.

    An interaction term of confidence and gender in a regression analysis showed that the effect of donors’ confidence on their redistributive preferences varied slightly by gender (Table 6 in Appendix A).

  8. 8.

    Although statistically significant differences were not found, as shown in Table 1, the redistributive preferences of confident donors in the DG were lower than those of the RDG, whereas those of unconfident donors were the opposite. For this reason, the effect size was not observed in the regression analysis, which simultaneously controls the confidence and the power (Table 6 in Appendix A).

  9. 9.

    The ratings of importance were: 1 (Not important at all), 2 (Not important), 3 (Not very important), 4 (Neither important nor unimportant), 5 (Slightly important), 6 (Important), and 7 (Very important). Average importance ratings were 3.60 for effort, 4.92 for ability, and 6.28 for luck. The interesting fact about the results of this questionnaire is that, while participants considered luck as important for obtaining a high score on this lottery task, they also believed that ability was important to a slight extent. They might have interpreted the word “ability” in a somewhat broad sense (e.g., the ability to mold one’s own destiny).

  10. 10.

    As noted in Sect. 2, participants drew computer-generated lots 12 times. Each draw was awarded a single score with a probability of 0.25. Hence, the expected value of the total score was 3.

  11. 11.

    Several studies (e.g. Dawes et al. 2007; Jeon et al. 2017; Johnson et al. 2009; Price and Sheremeta 2015) have suggested that the chance allocations of endowments may affect an individual’s income-changing behavior. In the present study, initial endowments in both treatments were determined by chance, so there is no comparator, and the effect of the chance allocation cannot strictly be discussed. While the results of experiments in which income disparity was by chance (this study) and by task (Iida 2015) are similar, rigorous verification will be required in the future.

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Acknowledgment

This study was supported by JSPS Grant in Aid for Scientific Research (C) Number 23530388, 16K03720. I thank Sobei H. Oda, Tsuyoshi Takahara, ZhouYan, and Byu Rai for their assistance in conducting the experiments. I also thank the editors and an anonymous referee for their helpful suggestions for this study.

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Appendices

Appendix A

See Tables 4, 5 and 6.

Table 4 Number of participants in each treatment, role, and confidence conditions
Table 5 A list of questionnaires
Table 6 Regression analysis of redistribution preferences: donor

Appendix B Instructions translated into English

Note: Parentheses indicate DG games. Brackets indicate RDG games.

Instruction

Thank you for participating in this experiment. Please switch off your cellphone and keep it in your bag. Do not speak with each other until the experiment is finished. Read the following instructions carefully and raise your hand if you cannot understand anything. We will attend to your question promptly.

Outline of the experiment

The outline of the experiment is as follows: first, you are made a member of a group of two. Members of both the groups take the procedure independently. The result of the procedure decides the amount of your reward. Next, you answer a question about how you want to change the distribution of rewards. (Finally, the demand of the better result in the procedure is accepted.) [Finally, one of the two will be randomly chosen and the demand of the chosen person is accepted.]

First stage

In the first stage, you take a procedure. Your result in the procedure becomes the source of your reward. You will be given instructions for the procedure when the experiment starts. Please follow the instructions on your PC screen. The person with the higher score receives a reward of 500 yen, and the lower-scoring one receives 0 yen. If the result is a tie, the quickest person to get the last single score gains 500 yen.

After the procedure is finished, please answer some questions regarding how you feel about the procedure. Finally, your score along with the result is displayed on the screen.

Second stage

In the second stage, you have a question regarding redistribution. If you are the person to have received a higher reward, you are questioned about what amount of your own reward you will give to your group member.

(The maximum amount you can answer is ¥250. The actual transfer will be the amount you determine. If you have received the lower reward, you will be asked what amount you wish to receive from your partner. Although your requested sum will not be paid to you, please assume it will be.)

[If you are the person to have received the lower reward, you are questioned as to what amount you wish to receive from the higher reward winning group member. The maximum amount you can answer is 250 yen. Your group member also answers the same question.

After both group members have answered, one of the demands of either member is chosen with a probability of ½ for either of the demands.

For example, if your reward was 500 yen, and you answered that the amount you would give to your group member was 50 yen and if your group member wants 150 yen, then your final reward could be either 450 yen or 350 yen—with 1/2 probability in each number.

If both you and your group member quote the same amount, the final reward is same—whether or not you are the one to be chosen.

You cannot know the answer of your group member. Please form your decision only on the basis of what you want to do.]

Your final profit is the amount of the reward decided from the experiment plus 500 yen as the participation fee.

Please feel free to ask in case you have any questions.

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Iida, Y. Confidence, power and distributive preferences. Mind Soc 19, 207–222 (2020). https://doi.org/10.1007/s11299-020-00234-4

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Keywords

  • Inequity aversion
  • Redistributive preferences
  • Dictator game
  • Experimental study
  • Self-esteem
  • Better-than-average effect