IDEAS home Printed from https://ideas.repec.org/a/aea/aecrev/v97y2007i3p944-947.html
   My bibliography  Save this article

Leadership and Information

Author

Listed:
  • Mana Komai
  • Mark Stegeman
  • Benjamin E. Hermalin

Abstract

An organization makes collective decisions through neither markets nor contracts. Instead, rational agents voluntarily choose to follow a leader. In many cases, incentive problems are solved: the unique nondegenerate equilibrium achieves the first best, even though every agent has incentives to free ride. The leader has no special talents but is distinguished by getting exclusive access to information. A crucial feature is that the leader reveals part but not all of her information. It is this maintenance of informational asymmetry that permits achieving the first best. (JEL D23, M54)

Suggested Citation

  • Mana Komai & Mark Stegeman & Benjamin E. Hermalin, 2007. "Leadership and Information," American Economic Review, American Economic Association, vol. 97(3), pages 944-947, June.
  • Handle: RePEc:aea:aecrev:v:97:y:2007:i:3:p:944-947
    Note: DOI: 10.1257/aer.97.3.944
    as

    Download full text from publisher

    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/aer.97.3.944
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Vesterlund, Lise, 2003. "The informational value of sequential fundraising," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 627-657, March.
    2. Steffen Huck & Pedro Rey-Biel, 2006. "Endogenous Leadership in Teams," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 162(2), pages 253-261, June.
    3. James Andreoni, 2006. "Leadership Giving in Charitable Fund-Raising," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 8(1), pages 1-22, January.
    4. Hermalin, Benjamin E., 2007. "Leading for the long term," Journal of Economic Behavior & Organization, Elsevier, vol. 62(1), pages 1-19, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dora L. Costa, 2014. "Leaders: Privilege, Sacrifice, Opportunity, and Personnel Economics in the American Civil War," Journal of Law, Economics, and Organization, Oxford University Press, vol. 30(3), pages 437-462.
    2. Makowsky, Michael D. & Orman, Wafa Hakim & Peart, Sandra J., 2014. "Playing with other people's money: Contributions to public goods by trustees," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 53(C), pages 44-55.
    3. Silvia Sonderegger, 2010. "Centralized Or Decentralized Information: Which Is Better For Providing Incentives?," Economic Inquiry, Western Economic Association International, vol. 48(2), pages 290-305, April.
    4. Kvaløy, Ola & Schöttner, Anja, 2015. "Incentives to motivate," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 26-42.
    5. Gershkov, Alex & Li, Jianpei & Schweinzer, Paul, 2016. "How to share it out: The value of information in teams," Journal of Economic Theory, Elsevier, vol. 162(C), pages 261-304.
    6. Emrah Arbak & Marie Claire Villeval, 2013. "Voluntary Leadership: Selection and Influence," Post-Print halshs-00664830, HAL.
    7. Philip J. Grossman & Mana Komai & Evelyne Benie, 2011. "Are Claims Of Transparency All They Are Cracked Up To Be?," Monash Economics Working Papers 27-11, Monash University, Department of Economics.
    8. Jones, Daniel B., 2017. "Too much information? An experiment on communication and cooperation," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 66(C), pages 29-39.
    9. Feltovich, Nick & Grossman, Philip J., 2015. "How does the effect of pre-play suggestions vary with group size? Experimental evidence from a threshold public-good game," European Economic Review, Elsevier, vol. 79(C), pages 263-280.
    10. Cagri S. Kumru & Lise Vesterlund, 2010. "The Effect of Status on Charitable Giving," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 12(4), pages 709-735, August.
    11. Philip J. Grossman & Mana Komai, 2008. "Leadership and Gender: An Experiment," Working Papers 2008-4, Saint Cloud State University, Department of Economics.
    12. Philip J. Grossman & Mana Komai & James E. Jensen, 2015. "Leadership and gender in groups: An experiment," Canadian Journal of Economics, Canadian Economics Association, vol. 48(1), pages 368-388, February.
    13. Bracha, Anat & Menietti, Michael & Vesterlund, Lise, 2011. "Seeds to succeed?," Journal of Public Economics, Elsevier, vol. 95(5), pages 416-427.
    14. Kim, Jaesoo, 2012. "Endogenous leadership in incentive contracts," Journal of Economic Behavior & Organization, Elsevier, vol. 82(1), pages 256-266.
    15. Houser, Daniel & Levy, David M. & Padgitt, Kail & Peart, Sandra J. & Xiao, Erte, 2014. "Raising the price of talk: An experimental analysis of transparent leadership," Journal of Economic Behavior & Organization, Elsevier, vol. 105(C), pages 208-218.
    16. Emrah Arbak & Marie-Claire Villeval, 2013. "Voluntary leadership: motivation and influence," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 40(3), pages 635-662, March.
    17. Mana Komai & Philip J. Grossman & Evelyne Benie, 2017. "Leadership and the effective choice of information regime," Theory and Decision, Springer, vol. 82(1), pages 117-129, January.
    18. Martin G. Kocher & Ganna Pogrebna & Matthias Sutter, "undated". "The Determinants of Managerial Decisions Under Risk," Working Papers 2008-04, Faculty of Economics and Statistics, University of Innsbruck.
    19. Zhou, Junjie, 2016. "Economics of leadership and hierarchy," Games and Economic Behavior, Elsevier, vol. 95(C), pages 88-106.
    20. Sumon Majumdar & Sharun Mukand, 2007. "The Leader as Catalyst: On Leadership and the Mechanics of Institutional Change," Working Papers 1128, Queen's University, Department of Economics.
    21. Mana Komai & Mark Stegeman, 2010. "Leadership based on asymmetric information," RAND Journal of Economics, RAND Corporation, vol. 41(1), pages 35-63.
    22. Lazear, Edward P., 2012. "Leadership: A personnel economics approach," Labour Economics, Elsevier, vol. 19(1), pages 92-101.

    More about this item

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aecrev:v:97:y:2007:i:3:p:944-947. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jane Voros) or (Michael P. Albert). General contact details of provider: http://edirc.repec.org/data/aeaaaea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.