OB Research Seminar - Beatrice Boulu-Reshef, Université d'Orléans

This paper investigates the tragedy of ill-informed leadership in a setting where both leaders and followers lack certainty about the returns from a public good. In this context, leaders may unknowingly drive potential followers to form incorrect beliefs about the state of the world, ultimately leading them to make decisions that are to their disadvantage. Our experimental results show that leaders in such a setting remain influential and have long-lasting effects despite their lack of informational advantage. This influence takes a tragic turn when leaders receive misleading signals, as misinformed leaders end up unintentionally misleading followers. Specifically, having a misleading leader is associated with a reduction in gains from contributions approximately twice as large as the reduction from halving the return from the public good. Our results underscore the significance of having well-informed leaders.