Leadership, Beliefs and Coordination: An Explorative Discussion

Although recent economics contributions represent important strides forward in the understanding of leadership behavior, the cognitive and symbolic dimensions of the phenomenon have attracted virtually no interest from economists and game theorists. I argue that an understanding of these dimensions may be founded on coordination games, particularly to the extent that these illustrate interactive belief formation. In this context leadership is defined as the taking of actions that coordinate the complementary actions of many people through the creation of belief conditions that substitute for common knowledge and where these actions characteristically consists of some act of communication directed at those being led. The concept of common knowledge (or its approximation by means of notions of common belief) is argued to be particularly important to understanding leadership. Thus, leaders may establish common knowledge conditions, and assist the coordination of strategies in this way, or make decisions in situations where coordination problems persist in spite of common knowledge. Copyright 2001 by Oxford University Press.