The Effect of Leadership in a Public Bad Experiment

Abstract

With regard to global or regional environmental problems, do countries that take unilateral actions inspire other countries to curtail emissions?In this paper this possibility is investigated by the use of a novel design of a laboratory public bad experiment with a leader.Twelve groups of five subjects played the game twice, with two treatments: ten rounds with a leader and ten rounds without a leader.The order of the treatments was varied over groups.A significant (within-subject) effect of leadership is found.Followers invest on average 15 percent less in the public bad when there is a leader setting the good example as opposed to a situation with no leader.Furthermore, total payoffs turn out to be significantly higher in the leader treatment than in the no-leader treatment.pollution;experimental design;public goods