The effect of leadership on free-riding: results from a public-good experiment

We examine the impact of two types of communication: (i) encouragement of honesty and (ii) encouragement of lying that benefits the group. Subjects choose contributions to a public good, with a portion of the contribution framed as determined by a self-reported die roll. While honesty is typically viewed as desirable, in our setting it is more equivocal, since it results in a sub-optimal group payoff. We find that when leaders encourage their followers to lie in a cooperative way, followers increase these “die roll” contributions. There is also a positive spillover into additional discretionary contributions to the public good. By contrast, the way leaders are chosen and their observed contribution history have little effect.