The Effect of Leadership in a Public Bad Experiment

Abstract

In the face of global or regional environmental problems, do countries that take unilateral actions inspire other countries to curtail emissions? The effect of leadership at the individual level is investigated by the use ofa novel design ofa laboratory public bad experiment with a leader. Twelve groups of5 participants played the game twice with two treatments: 10 rounds with a leader and 10 rounds without a leader. The order ofthe treatmentswas balanced over groups. A significant (within-subject) effect of leadership is found. Followers invest, on average, 13% less in the public bad when there is a leader setting the good example as opposed to a situation with no leader. This produces benefits also to the leaders but not enough to recover all the costs of taking a leading position.

Words versus actions as a means to influence cooperation in social dilemma situations

“…Previous experimental studies (e.g., Issac et al, 1964;Palfrey and Prisbrey, 1997;Moxnes and Van der Heijden, 2003;Bochet et al, 2006;Güth et al, 2007) provide robust evidence of positive contributions in voluntary contribution games. One of the possible explanations for this behavior is that experimental participants make errors (e.g., Offerman et al, 1998).…”

“…In the first treatment, all players make simultaneous and binding decisions about how much money they want to contribute to the group activity without communicating with each other. In the second treatment, one of the players (henceforth, a leader) moves first and has an opportunity to influence cooperation by taking action (e.g., Moxnes and Van der Heijden, 2003;Güth et al, 2007). 1 In this case, the leader makes a prior binding commitment (to contribute or not) and sets an example for the other group members (henceforth, followers) before they make their decisions.…”

“…When the followers observe that the leader exerts effort towards attaining the group goal, they tend to increase their effort levels. Several empirical studies, inspired by Hermalin's results, explore the impact of leaders' binding commitments in voluntary contribution experiments (e.g., Gächter and Renner, 2003;Moxnes and Van der Heijden, 2003;Arbak and Villeval, 2007;Levati et al, 2007;Güth et al, 2007, Potters et al, 2007and Gächter et al, 2010. They provide robust evidence that leaders' positive prior commitments to the group activity increase followers' contributions and facilitate cooperation.…”

The dark side of leadership: An experiment on religious heterogeneity and cooperation in India

“…Komai and Grossman 2009;Moxnes and van der Heijden 2003). Moreover, while in pure groups (Hhhh, Mmmm) leaders induce cooperation levels of roughly the size of the control treatment (hhhh, mmmm), cooperation in mixed groups deteriorates with leadership and is significantly lower than the average contribution in mixed control groups (p = 0.001).…”

“…So far, laboratory experiments have focused on the effects of leadership in culturally homogeneous groups (e.g. Güth et al 2007; Levati et al 2007; Moxnes and van der Heijden 2003). In our experiment we test the efficacy of 'Leading by example' to foster voluntary cooperation in religiously heterogeneous groups.…”