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Leading with the (recently) successful? Performance visibility and the evolution of risk taking


Ehret, Sönke; Vogt, Sonja; Hefti, Andreas; Efferson, Charles (2021). Leading with the (recently) successful? Performance visibility and the evolution of risk taking. Working paper series / Department of Economics 382, University of Zurich.

Abstract

The popular practice of “leading by the successful” is viewed as a hallmark of motivational leadership. A central rationale for leaders to make successful team members salient is that it may induce social learning, where followers strive to adopt a favorable behavior. The reliance of a leader on such success-biased social learning presumes that imitation by followers occurs only to the extent as outstanding success was caused by a superior ability or knowledge of the respective peer. In this article, we conduct a laboratory experiment to study whether imitation of the successful may occur even if imitation necessarily fails to be an effective way of improving one’s performance. The experimental approach establishes the necessary control to assure that success-biased learning cannot systematically improve the decisions made, and allows us to isolate the behavior of the followers from possible feedback effects of the leader. The data show that a substantial amount of imitation occurs, which in our setting leads to a sizeable and persistent increase of the average risk taken in the teams. Our finding thus indicates a limitation of the practice to lead with the successful.

Abstract

The popular practice of “leading by the successful” is viewed as a hallmark of motivational leadership. A central rationale for leaders to make successful team members salient is that it may induce social learning, where followers strive to adopt a favorable behavior. The reliance of a leader on such success-biased social learning presumes that imitation by followers occurs only to the extent as outstanding success was caused by a superior ability or knowledge of the respective peer. In this article, we conduct a laboratory experiment to study whether imitation of the successful may occur even if imitation necessarily fails to be an effective way of improving one’s performance. The experimental approach establishes the necessary control to assure that success-biased learning cannot systematically improve the decisions made, and allows us to isolate the behavior of the followers from possible feedback effects of the leader. The data show that a substantial amount of imitation occurs, which in our setting leads to a sizeable and persistent increase of the average risk taken in the teams. Our finding thus indicates a limitation of the practice to lead with the successful.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Department of Economics
Dewey Decimal Classification:330 Economics
JEL Classification:C91, C92, D91
Uncontrolled Keywords:Social learning, laboratory experiments, motivational leadership
Language:English
Date:April 2021
Deposited On:09 Apr 2021 13:03
Last Modified:14 Apr 2021 15:23
Series Name:Working paper series / Department of Economics
Number of Pages:38
ISSN:1664-705X
OA Status:Green
Official URL:https://www.econ.uzh.ch/en/research/workingpapers.html?paper-id=1064

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