Why votes have a value

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: SFB 649 Discussion Paper ; No. 2007,068

Classification and Topics

• Classification: Wirtschaft ; Design of Experiments: Laboratory, Group Behavior ; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior ; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
• Subject: Voting ; dual-class shares ; paradox of voting ; experimental economics ; Stimmrecht (Gesellschaftsrecht) ; Willingness to pay ; Abstimmungsparadoxon ; Test

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Dittmann, Ingolf ; Kübler, Dorothea ; Maug, Ernst ; Mechtenberg, Lydia
• Event: Veröffentlichung
• (who): Humboldt University of Berlin, Collaborative Research Center 649 - Economic Risk
• (where): Berlin
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/25240
• Last update: 10.03.2025, 11:46 AM CET