Power up : A Cognitive Explanation of Heterogeneity in Preferences for Power

A person’s lived experience, including their culture and upbringing, affects their cognition. This affects how they perceive any given situation. We use differences in cultural norms regarding individualism to explain preference heterogeneity about power. Using matched employee- establishment data and an international index of individualism, we find causal evidence that inherited individualism increases the marginal satisfaction from workplace power/authority. To account for endogeneity, we instrument for authority using equivalent employees in a different but similar country. We also include establishment random effects, pay and other individual characteristics. A placebo test confirms the relationship is specific to power rather than general satisfaction