Review of Behavioral Economics > Vol 7 > Issue 1

The Effect of Leadership on Free-Riding: Results from a Public-Good Experiment

Daniel M. Parsons, Monash Business School, Australia, parsonsdaniel34@gmail.com Nick Feltovich, Monash Business School, Australia, nicholas.feltovich@monash.edu Philip J. Grossman, Monash Business School, Australia and University of Alaska Anchorage, USA, philip.grossman@monash.edu
 
Suggested Citation
Daniel M. Parsons, Nick Feltovich and Philip J. Grossman (2020), "The Effect of Leadership on Free-Riding: Results from a Public-Good Experiment", Review of Behavioral Economics: Vol. 7: No. 1, pp 31-63. http://dx.doi.org/10.1561/105.00000117

Publication Date: 25 Mar 2020
© 2020 D. M. Parsons, N. Feltovich and P. J. Grossman
 
Subjects
Behavioral economics,  Public economics: Public goods,  Economic theory: Game theory,  Managerial characteristics and behavior of entrepreneurs,  Behavioral decision making
 
Keywords
JEL Codes: D91D23C72C92H41M14
LeaderCheap talkLyingHonestyGroup culture
 

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In this article:
1. Introduction
2. Literature Review
3. Experimental Design
4. Experimental Procedures
5. Results
6. Conclusion
Appendix A: Instructions from the Experiment
References

Abstract

We examine the impact of two types of communication: (i) encouragement of honesty and (ii) encouragement of lying that benefits the group. Subjects choose contributions to a public good, with a portion of the contribution framed as determined by a self-reported die roll. While honesty is typically viewed as desirable, in our setting it is more equivocal, since it results in a sub-optimal group payoff. We find that when leaders encourage their followers to lie in a cooperative way, followers increase these “die roll” contributions. There is also a positive spillover into additional discretionary contributions to the public good. By contrast, the way leaders are chosen and their observed contribution history have little effect.

DOI:10.1561/105.00000117