Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/25240
Authors: 
Dittmann, Ingolf
Kübler, Dorothea
Maug, Ernst
Mechtenberg, Lydia
Year of Publication: 
2007
Series/Report no.: 
SFB 649 discussion paper 2007,068
Abstract: 
We perform an experiment where subjects pay for the right to participate in a shareholder vote. We find that experimental subjects are willing to pay a significant premium for the voting right even though there should be no such premium in our setup under full rationality. Private benefits from controlling the firm are absent from our setup and overconfidence cannot explain the size of the observed voting premium. The premium disappears in treatments where voting has no material consequences for the subjects. We conclude that individuals enjoy being part of a group that exercises power and are therefore willing to pay for the right to vote even when the impact of their own vote on their payoffs is negligible.
Subjects: 
Voting
dual-class shares
paradox of voting
experimental economics
JEL: 
C92
D72
G32
Document Type: 
Working Paper

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