Behavioral Economics

Abhijit Ramalingam (Appalachian State University)

  • Status and Trust in Representative Leaders: A Lab-in-the-Field Experiment in Rural Sarawak

  • We study the role of representative leadership wherein one agent acts as the representative of a group of team-producers in their joint interaction with outsiders. While such representative leadership is ubiquitous – for example, elected representatives negotiating benefits for their constituents, heads securing funding for their departments, union leaders agreeing wages on behalf of their members, etc. – the literature has paid little attention to this role of leaders. This form of leadership has three distinguishing features: (i) followers and leaders perform different tasks – respectively, collective action and external negotiation, (ii) leaders have an opportunity to extract rent from the group, and (iii) the relationship requires trust – followers need to trust leaders to try to secure the best outcomes for the group. We are interested in whether, in such interactions, mutual trust can and does emerge, and whether groups are able to use trust relationships to improve group outcomes.

    We introduce a novel sequential public goods game that captures this interaction within groups, where individuals perform different roles. In particular, the effort of one player (the ‘representative’) is complementary with the total contributions of the others (the ‘followers’). We implement the game in a field setting – villages of the Kayan in rural Sarawak in Borneo, Malaysia. Small-scale societies such as these have traditionally relied on leaders to coordinate interactions (for example, warfare, raiding, and alliance formation) with neighbouring societies. Of late, the role of leaders in these societies has evolved to include negotiations with private firms, nongovernmental organisations (NGOs) and government agencies, for instance to secure funding for public amenities, or to be a party in the state’s sustainable forest management policy. Leaders are often able to use their influence on villagers’ voting behaviour as a bargaining chip in negotiations with government agencies. These societies have clearly delineated traditional hierarchies that tend to be linked to leadership roles. We explore the relationship between (self-reported) relative status of individuals and the emergence of trust between followers and the leaders who represent them outside. We thus explore one of the ways in which communities solve their own collective action problems, and how they might use pre-existing solutions (status indicators) to solve new problems (external negotiations) they might face.

    We find that representatives in general behaved prosocially, often at personal cost, to improve their group’s outcome. This was regardless of their relative status within the group. Further, there was little correlation between the effort of followers and that of leaders. However, villagers who were judged to have high status were more likely to provide greater effort in their roles as followers. This is the path through which status increased efficiency in groups.

  • Location:
    https://helsinki.zoom.us/j/68476541863?pwd=b21hVmdTWEdheHFnSGFGVzNFT2tiUT09
  • Address:
Organizers
MH
Marja-Liisa Halko

University of Helsinki

marja-liisa.halko at helsinki.fi