OLA KVALØY

  • Fair Advice (with O. Dijk, K.W. Eriksen and S. Fest)
  • Abstract:
    The paper presents results from an experiment studying advisors’ behavior under conflicting interests. We use a binary dictator game as a baseline and transform the game to a situation where the dictator gives a binding advice and a non-binding advice, respectively. We also vary the payoff functions to include both certain and risky outcomes. We find that subjects are averse to giving bad advice. The proportion of subjects choosing the selfish option decreases by 25% when the game is transformed from a dictator game to an advisor game. When outcomes are certain, this “fairness effect” appear even when the advice is binding, i.e. when the recipient has to follow that advisor’s advice. Under risky outcomes, however, the fairness effect appear only when the advice is non-binding – i.e. when the recipient is himself responsible for the actual choice.