Occasionally Libertarian: Experimental Evidence of Self-Serving Omission Bias

ANDREW HAYASHI, Furman Center for Real Estate and Urban Policy - NYU School of Law

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Journal of Law, Economics, & Organization ©: Vol. 30 (2014). Published by Oxford University Press. All rights reserved.

Abstract

People evaluate outcomes, in part, by how those outcomes came about and who caused them. For example, attitudes about the proper amount of redistributive taxation reflect beliefs about the causal roles played by luck and human agency in creating the pre-tax income distribution. Causal attribution, however, is a process both complicated and subject to bias. I generate individual-level data from a variation on the dictator game in which the participants’ initial endowments are manipulated to identify one aspect of how people care about causal attribution. The data are inconsistent with models of preferences defined solely over outcomes and also with a general bias toward inaction. Subjects care independently, but conditionally, about the effects of their own actions and demonstrate a bias toward inaction only when it is in their self-interest.