Related Experiment Video
Updated: Dec 6, 2025

Inverse Probability of Treatment Weighting Propensity Score using the Military Health System Data Repository and National Death Index
Published on: January 8, 2020
Is there a social cost of randomization?
Johannes Haushofer1,2,3, Michala Iben Riis-Vestergaard1, Jeremy Shapiro3
1Princeton University, Peretsman-Scully Hall, Princeton, NJ 08540, USA.
Abstract:
Randomized controlled trials, which randomly allocate benefits to a treatment group and not a control group, ascribe differences in post-treatment welfare to the benefits being allocated. However, it is possible that potential recipients' welfare is not only affected by the receipt of the program, but also by the allocation mechanism (procedural utility). In this paper, we ask whether potential recipients support or oppose random allocation of financial benefits, by allowing them to reward or punish an allocator conditional on her choice of allocation mechanism: direct allocation to one recipient vs. randomization among potential recipients. We find that when potential recipients have equal endowments, they on average reward the allocator for randomizing. When instead there is inequality in the potential recipients' endowments, the relatively poorer recipients punish allocators who randomize, while the relatively richer potential recipients neither reward nor punish the allocator for randomizing. Our results suggest that an allocator who chooses to randomize between potential recipients with unequal endowments imposes a social cost on the relatively poorer potential recipients.
More Related Videos
13:04Measuring the Subjective Value of Risky and Ambiguous Options using Experimental Economics and Functional MRI Methods
Published on: September 19, 2012
07:31Implementation of a Real-Time Psychosis Risk Detection and Alerting System Based on Electronic Health Records using CogStack
Published on: May 15, 2020
Related Concept Videos
Randomized Experiments
Simple randomization
Simple...
Group Design
Regression Toward the Mean
Blinding
Random Error
Random and Systematic Errors