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Leadership based on asymmetric information


  • Mana Komai
  • Mark Stegeman


Rational players, unconstrained by contracts or formal authority, choose to follow a better-informed leader, whose action reveals part of her information. If the leader satisfies a credibility condition, then the unique nondegenerate equilibrium solves distinct shirking and coordination problems and achieves the first best. If credibility fails, as is more likely for a large organization, then followers ignore the leader, and equilibria are very inefficient. Appointing multiple leaders, or a high-cost leader, can restore credibility. If players invest privately in information, then a leader often appears endogenously. The equilibrium concept is an original extension of sequential equilibrium to continuous states. Copyright (c) 2010, RAND.

Suggested Citation

  • Mana Komai & Mark Stegeman, 2010. "Leadership based on asymmetric information," RAND Journal of Economics, RAND Corporation, vol. 41(1), pages 35-63.
  • Handle: RePEc:bla:randje:v:41:y:2010:i:1:p:35-63

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    References listed on IDEAS

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    11. 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.
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    Cited by:

    1. 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.
    2. Kvaløy, Ola & Schöttner, Anja, 2015. "Incentives to motivate," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 26-42.
    3. Bryan C. McCannon, 2015. "Leadership and Motivation for Public Goods Contributions," Working Papers 15-24, Department of Economics, West Virginia University.
    4. 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.
    5. 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.
    6. Stone, Daniel F. & Miller, Steven J., 2013. "Leading, learning and herding," Mathematical Social Sciences, Elsevier, vol. 65(3), pages 222-231.
    7. 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.
    8. Kim, Jaesoo, 2012. "Endogenous leadership in incentive contracts," Journal of Economic Behavior & Organization, Elsevier, vol. 82(1), pages 256-266.
    9. 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.
    10. Zhou, Junjie, 2016. "Economics of leadership and hierarchy," Games and Economic Behavior, Elsevier, vol. 95(C), pages 88-106.
    11. Lazear, Edward P., 2012. "Leadership: A personnel economics approach," Labour Economics, Elsevier, vol. 19(1), pages 92-101.

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