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The tragedy of ill-informed leadership: An experimental study

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  • Boulu-Reshef, Béatrice
  • Rapoport, Nina

Abstract

This paper investigates the tragedy of ill-informed leadership in a setting where both leaders and followers lack certainty about the returns from a public good. In this context, leaders may unknowingly drive followers to form incorrect beliefs about the state of the world, ultimately leading them to make decisions that are to their disadvantage. Using a laboratory experiment, we show that leaders need not hold perfect information about the state of the world to be influential. When leaders are ill-informed, this influence takes a tragic turn, as leaders who (rationally) follow their information end up misleading followers and generating substantial welfare losses. Specifically, having a misleading leader is associated with a reduction in gains from contributions approximately twice as large as the reduction from halving the return from the public good. Our results underscore the significance of having well-informed leaders.

Suggested Citation

  • Boulu-Reshef, Béatrice & Rapoport, Nina, 2026. "The tragedy of ill-informed leadership: An experimental study," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 122(C).
    • Handle: RePEc:eee:soceco:v:122:y:2026:i:c:s2214804326000303
    DOI: 10.1016/j.socec.2026.102539
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    Keywords

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    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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