Preferences for power

Elena S. Pikulina, Chloe Tergiman

Research output: Contribution to journalArticlepeer-review

Abstract

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, to demonstrate that a substantial fraction of individuals enjoy the intrinsic value of power: they accept lower payoffs in exchange for power over others, without any benefits to themselves. These preferences exist independently of other components of decision rights, cannot be explained by social preferences and are not driven by mistakes, confusion or signaling intentions. We further show that valuation of power (i) is higher when individuals directly determine outcomes of others; (ii) depends on how much discretion one has over those outcomes; and (iii) is tied to relationships between individuals. We establish that ignoring preferences for power may have large welfare implications and, consequently, should be included in the study of political systems and labor contracts.

Original languageEnglish (US)
Article number104173
JournalJournal of Public Economics
Volume185
DOIs
StatePublished - May 2020

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics

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