The dos and don'ts of leadership in sequential public goods experiments

Abstract

We study the effects of leadership in the provision of public goods by examining (i) the relative importance of reward and punishment as leadership devices, (ii) whether endogenous leadership is more efficient than exogenously enforced leadership, and (iii) whether leaders contributing last, instead of first, also increase contributions. The experimental results are: (i) Reward options yield lower contributions than punishment through exclusion. (ii) Endogenous leadership is much more efficient than exogenously imposed leadership. (iii) Sequentiality itself is not beneficial for contributions since groups where the leader contributes as the last member do not contribute more than groups without a leader.