Header

UZH-Logo

Maintenance Infos

Fool me once: an experiment on credibility and leadership


Cooper, David J; Hamman, John R; Weber, Roberto A (2020). Fool me once: an experiment on credibility and leadership. Economic Journal, 130(631):2105-2133.

Abstract

We investigate ‘social credibility’, a leader’s ability to convince followers that conditions are favourable and that others will follow the leader's advice. To do so, we study an experimental joint venture with three key properties: returns are uncertain, investments are complements, and investment is often more beneficial for the leader than the followers. The leader has private information about investment returns and can facilitate coordination through cheap-talk recommendations. We find that leaders manage social credibility by forgoing potentially profitable advice to invest, increasing the likelihood that subsequent recommendations are followed. We identify factors that affect the persistence of social credibility.

Abstract

We investigate ‘social credibility’, a leader’s ability to convince followers that conditions are favourable and that others will follow the leader's advice. To do so, we study an experimental joint venture with three key properties: returns are uncertain, investments are complements, and investment is often more beneficial for the leader than the followers. The leader has private information about investment returns and can facilitate coordination through cheap-talk recommendations. We find that leaders manage social credibility by forgoing potentially profitable advice to invest, increasing the likelihood that subsequent recommendations are followed. We identify factors that affect the persistence of social credibility.

Statistics

Citations

Dimensions.ai Metrics
5 citations in Web of Science®
6 citations in Scopus®
Google Scholar™

Altmetrics

Downloads

0 downloads since deposited on 25 Jan 2021
0 downloads since 12 months

Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Scopus Subject Areas:Social Sciences & Humanities > Economics and Econometrics
Uncontrolled Keywords:Economics and econometrics
Scope:Discipline-based scholarship (basic research)
Language:English
Date:October 2020
Deposited On:25 Jan 2021 14:39
Last Modified:25 Mar 2024 02:47
Publisher:Wiley-Blackwell Publishing, Inc.
ISSN:0013-0133
OA Status:Closed
Publisher DOI:https://doi.org/10.1093/ej/ueaa059
Other Identification Number:merlin-id:20582
Project Information:
  • : FunderSNSF
  • : Grant ID100018_140571
  • : Project TitleLeadership Across Economic Contexts