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On the effectiveness of leading by example in public goods games

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  • Sohn, Jin-yeong
  • Jang, Dooseok

Abstract

Despite the growing interest in leadership in the experimental literature, theoretical analyses of leadership have received relatively limited attention. This study investigates the effectiveness of leading by example in public goods games among reciprocal agents. The “leading-by-example” game (LBE) is a two-stage game with the same payoff structure as the classic voluntary contribution mechanism (VCM), in which a leader first makes a contribution decision, followed by the followers who make a contribution decision upon observing the leader’s move. If the marginal per capita return (MPCR) is sufficiently high, LBE is more effective than VCM at inducing contributions. However, if MPCR is low, VCM is more effective than LBE. An experimental test of the comparative statics is conducted.

Suggested Citation

  • Sohn, Jin-yeong & Jang, Dooseok, 2024. "On the effectiveness of leading by example in public goods games," Journal of Economic Behavior & Organization, Elsevier, vol. 224(C), pages 266-281.
    • Handle: RePEc:eee:jeborg:v:224:y:2024:i:c:p:266-281
    DOI: 10.1016/j.jebo.2024.05.021
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    More about this item

    Keywords

    Cooperation; Public goods game; Reciprocity; Leadership; Leading-by-example;
    All these keywords.

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • H4 - Public Economics - - Publicly Provided Goods

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