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Leadership, cheap talk and really cheap talk

David Levy, Kail Padgitt, Sandra J. Peart, Daniel Houser () and Erte Xiao ()

Journal of Economic Behavior & Organization, 2011, vol. 77, issue 1, 40-52

Abstract: Previous research offers compelling evidence that leaders suffice to effect efficiency-enhancements on cooperation, yet the source of this effect remains unclear. To investigate whether leadership effects can be attributed exclusively to the common information that leaders provide to a group, irrespective of the source of that information, we design a public goods game in which non-binding contribution suggestions originate with either a human or computer leader. We find that group members' decisions are significantly influenced by human leaders' non-binding contribution suggestions, both when the leader is elected as well as when the leader is randomly chosen. A leader's suggestion becomes an upper bound for group member's contributions. Identical suggestions do not impact the group members' decisions when they originate with a computer, thus supporting to the view that information provided by human leaders is uniquely able to establish welfare-enhancing norms.

Date: 2011
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