On the economic value of decision rights: An experimental test

Abstract

According to the theoretical freedom-of-choice literature and a growing body of experiments, the economic value of a decision right is reflected not only in its instrumental value, but also in an additional intrinsic value. Building upon findings from previous experiments, I use a novel two-stage laboratory experiment to examine (i) whether individuals value decision rights intrinsically, (ii) how intrinsic valuation depends on structural determinants of the related decision, and (iii) why individuals value decision rights that have no instrumental benefits. I find decision rights to have intrinsic value which is conditioned by stake size, risk, and domain. Intrinsic-value assignment is positively correlated with a preference for self-determination and –in the domain of losses– with a preference for non-interference of others. Aversion to paternalism is no significant motive behind the intrinsic valuation of decision rights.