Essays on social distance and economic decision making

Mohtashami Borzadaran, Hamideh (2022). Essays on social distance and economic decision making. University of Birmingham. Ph.D.

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Abstract

The following thesis presents three distinct experiments focusing on social distance. We first examine experimentally whether individuals’ decision to delegate is a function of social distance. Using a principal-agent setup we offer the principals the option to either decide themselves how much money to share with a recipient or hire an agent to make the decision on their behalf. By varying the social distance between principals and recipients we provide new evidence that shows low social distance makes principals less likely to delegate, ceteris paribus. Additionally, we find that even when principals decide to delegate, low social distance makes them more pro-social and thus, delegation is not used as a means to shift the blame for selfish behaviour.

The second experiment examines the potential motives explaining why people delegate less as social distance decreases. Our focus is on two motives: direct altruistic motives and expectation of future reciprocal favours. To study the effect of directed altruism, we vary the social distance between principal and agent while keeping the anonymity between them. To observe the role of expected reciprocity we vary anonymity between friends. Our results suggest that, for a given sharing decision, it is directed altruism that drives the decrease in principals’ delegation decision when social distance is closer between principal and recipient. We do not find expected reciprocity to play a role in principals’ delegation decisions, however, we do find this motive to drive principals’ choice of a pro-social agent.

The final experiment examines the role of culture on individuals’ performance and willingness to compete. Subjects take part in a summation task with either a competitive payment incentive or a fixed payment incentive. To observe the role of closeness in culture, we invite Chinese subjects who are from a collectivist culture and British subjects who are from an individualistic culture. We find that subjects from the Chinese culture perform better in both competitive and non-competitive tasks compared to subjects from the British culture. We do not find a difference between Chinese and British subject tournament entry decisions.

Type of Work:

Thesis (Doctorates > Ph.D.)

Award Type:

Doctorates > Ph.D.

Supervisor(s):