Open AccessIntention and Stochastic Outcomes: An Experimental study
Author(s) -
Charness Gary,
Levine David I.
Publication year - 2007
Publication title -
the economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 4.683
H-Index - 160
eISSN - 1468-0297
pISSN - 0013-0133
DOI - 10.1111/j.1468-0297.2007.02066.x
Subject(s) - econometrics , economics , psychology
Do people care about intentions – even when good intentions do not produce good results? In our experiments we find that rates of punishment and reward react strongly to intentions (the wage a firm decides to pay) and more modestly to distributional outcomes (the higher or lower wage actually received including the stochastic component). For example, workers who end up receiving medium wages respond much more positively when this resulted from the firm offering a high wage but bad luck lowered the worker's pay than when this resulted from the firm offering a low wage and good luck raised the pay.