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Leading by Example? Investment Decisions in a Mixed Sequential-Simultaneous Public Bad Experiment

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Author Info

  • Heijden, E.C.M. van der
  • Moxnes, E.

    (Tilburg University, Center for Economic Research)

Abstract

This paper investigates the effect of having a leader in a laboratory public bad experiment with five subjects in each group.The control treatment is a standard public bad experiment, while in the leader treatments the design is such that in each group the leader decides first on his or her investment in the public bad.After being informed about the leader s decision, the four followers in each group make their investment decision.Two treatments of the leadership game are played with each group.In the same-leader-costs treatment, all subjects are confronted with the same costs, while in the no-leader-costs treatment the leader faces no direct costs of acting socially.It is found that followers invest significantly less in the public bad when there is a leader compared with a situation when there is no leader.Comparing the two treatments, we find, moreover, that the leadership effect is somewhat stronger when leaders face the same costs as followers compared with the situation in which leaders bear no costs.Randomly chosen leaders set an example by investing less than average players in a standard public bad game, and leader investments are lowest when the costs of leading are low.

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Bibliographic Info

Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2003-38.

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Date of creation: 2003
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Handle: RePEc:dgr:kubcen:200338

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Web page: http://center.uvt.nl

Related research

Keywords: investment; public goods; experiment; leadership;

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Cited by:
  1. Rivas, M. Fernanda & Sutter, Matthias, 2011. "The benefits of voluntary leadership in experimental public goods games," Economics Letters, Elsevier, vol. 112(2), pages 176-178, August.
  2. Sarah Jacobson & Jason Delaney, 2012. "The Good of the Few: Reciprocity in the Provision of a Public Bad," Department of Economics Working Papers 2012-02, Department of Economics, Williams College.
  3. Guth, Werner & Levati, M. Vittoria & Sutter, Matthias & van der Heijden, Eline, 2007. "Leading by example with and without exclusion power in voluntary contribution experiments," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 1023-1042, June.
  4. Gürerk, Özgür & Irlenbusch, Bernd & Rockenbach, Bettina, 2009. "Motivating teammates: The leader's choice between positive and negative incentives," Journal of Economic Psychology, Elsevier, vol. 30(4), pages 591-607, August.

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