The acceptability of lotteries in allocation problems : a choice-based approach

Bouacida, Elias and Foucart, Renaud (2020) The acceptability of lotteries in allocation problems : a choice-based approach. Working Paper. Lancaster University, Department of Economics, Lancaster.

Text (LancasterWP2020_013)
LancasterWP2020_013.pdf - Published Version
Download (422kB)

Abstract

We report the results of two experiments on the social acceptability of random devices in allocation mechanisms. A majority of subjects do not opt for a lottery if they can rationalize an alternative mechanism as non-random. It is, however, possible to design a payoff-equivalent mechanism to the lottery that is more acceptable. Our results shed light on the real-world reliance on obscure criteria in allocation problems where lotteries seem to be simpler and more efficient.