An experimental study of leadership institutions in collective action games

Abstract

We investigate the effectiveness of two leadership institutions in each of two games: a weakest link and a linear public good game. An ‘‘Exemplar’’ leader is a first mover who commits to a level of contribution; a ‘‘Manager’’ is a first mover who makes cheap talk suggestions to the team members. Our results show that both leadership institutions reduce coordination failures as compared to a simultaneous move, baseline scenario with no leader. Although the Manager treatment seems to be slightly more effective at the outset, both leadership institutions significantly and equally improve contributions in the coordination game over time. According to our results none of the leadership institutions seem effective in the linear public good game. This may be due to the fact that our marginal per capita return is rather large, keeping the contribution levels high regardless of the treatment. Subjects who choose to free ride continue to do so with or without leaders, and subjects who choose to be cooperative do not become discouraged by others’ lack of cooperation.