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Raising the Price of Talk: An Experimental Analysis of Transparent Leadership

Author

Listed:
  • Daniel Houser

    () (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University)

  • David M. Levy

    () (Center for the Study of Public Choice and Department of Economics, George Mason University)

  • Kail Padgitt

    (Tax Foundation)

  • Sandra J. Peart

    () (University of Richmond)

  • Erte Xiao

    () (Department of Social and Decision Sciences Carnegie Mellon University)

Abstract

Does transparent leadership promote cooperative groups? We address this issue using a public goods experiment with exogenously selected leaders who are able to send non-binding contribution suggestions to the group. To investigate the effect of transparency in this setting we vary the ease with which a leader’s actions are known by the group. We find leaders’ suggestions encourage cooperation in all treatments, but that both leaders and their group members are more likely to follow leaders’ recommendations when institutions are transparent so that non-leaders can easily see what the leader does. Consequently, transparency leads to significantly more cooperation, higher group earnings and reduced variation in contributions among group members. Length: 46

Suggested Citation

  • Daniel Houser & David M. Levy & Kail Padgitt & Sandra J. Peart & Erte Xiao, 2014. "Raising the Price of Talk: An Experimental Analysis of Transparent Leadership," Working Papers 1048, George Mason University, Interdisciplinary Center for Economic Science.
  • Handle: RePEc:gms:wpaper:1048
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    References listed on IDEAS

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    3. Drouvelis, Michalis & Nosenzo, Daniele & Sefton, Martin, 2017. "Team incentives and leadership," Journal of Economic Psychology, Elsevier, vol. 62(C), pages 173-185.
    4. 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.
    5. Elsner, Wolfram, 2015. "Policy Implications of Economic Complexity and Complexity Economics," MPRA Paper 63252, University Library of Munich, Germany.
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    7. Wolfram Elsner, 2019. "Policy and state in complexity economics," Chapters, in: Nikolaos Karagiannis & John E. King (ed.), A Modern Guide to State Intervention, chapter 1, pages 13-48, Edward Elgar Publishing.
    8. van Winden, Frans, 2015. "Political economy with affect: On the role of emotions and relationships in political economics," European Journal of Political Economy, Elsevier, vol. 40(PB), pages 298-311.

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