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Leadership, Information, and Risk Attitude: A Game Theoretic Approach

Author

Listed:
  • John T. Kulas
  • Mana Komai
  • Saint Cloud State University
  • Philip J. Grossman

Abstract

This paper experimentally investigates how risk attitudes mitigate leadership effectiveness in a collective setting with projects that exhibit both free riding and coordination problems. We take two novel approaches: 1) the introduction of economic game theory to psychological studies of leadership, and 2) the application of the leadership ontology of Drath et al. (2008) as a crossdisciplinary integrative framework. Leadership here is focused on the presence or absence of direction, alignment, and commitment as well as antecedent beliefs and practices that are held within a collective (for us, our experimental participants). Our leadership context is stripped down to very minimal conditions: three group members, an investment decision, and the introduction of information regarding group members' attitudes toward risk. We find that the mere mention of risk attitude (whether risky or risk averse) undermines leadership effectiveness in mitigating free riding for our 420 experimental participants. Our study’s primary implications lie in the application of game theory methodology to the psychological study of leadership, the introduction of relevant individual difference constructs to economic studies of leadership, and the advocation of the Drath et al. (2008) framework as a helpful integrative mechanism for interdisciplinary leadership research.

Suggested Citation

  • John T. Kulas & Mana Komai & Saint Cloud State University & Philip J. Grossman, 2013. "Leadership, Information, and Risk Attitude: A Game Theoretic Approach," Monash Economics Working Papers 30-13, Monash University, Department of Economics.
  • Handle: RePEc:mos:moswps:2013-30
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    File URL: http://www.buseco.monash.edu.au/eco/research/papers/2013/index.html
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    Cited by:

    1. Nisvan Erkal & Lata Gangadharan & Boon Han Koh, 2018. "Attribution biases in Leadership: Is it effort or luck ?," Department of Economics - Working Papers Series 2040, The University of Melbourne.
    2. Selhan Garip Sahin & Catherine Eckel & Mana Komai, 2015. "An experimental study of leadership institutions in collective action games," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 1(1), pages 100-113, July.
    3. Christian Zehnder & Holger Herz & Jean-Philippe Bonardi, 2016. "A Productive Clash of Cultures: Injecting Economics into Leadership Research," CESifo Working Paper Series 6175, CESifo.
    4. 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.
    5. 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.

    More about this item

    Keywords

    game theory; risk attitude; interdisciplinary research; group dynamics;

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