Journal article
Managerial Leadership, Truth-Telling, and Efficient Coordination
The Economic Journal, Vol.135(670), pp.1942-1979
07/28/2025
DOI: 10.1093/ej/ueaf019
Abstract
We study the manager-agent (MA) game, a novel coordination game played between a manager and two agents. Unlike commonly studied coordination games, the MA game stresses asymmetric information (agents know the state of the world but managers don't) and asymmetric payoffs (for all states of the world, agents have opposing preferences over outcomes). Efficient coordination requires coordinating agents’ actions and utilizing their private information. We vary how agents’ actions are chosen (managerial control versus delegation), the mode of communication (none, structured communication, or free-form chat), and the channels of communication (i.e. who can communicate with each other). Achieving coordination per se is not challenging, but, averaging across all states of the world, total surplus only surpasses the safe outcome when managerial control is combined with three-way free-form chat. Unlike weak-link games, advice from managers to agents does not increase total surplus. The combination of managerial control and free-form chat works because under these conditions agents rarely lie about their private information. Our results suggest that common findings from the experimental literature on lying are not robust to changes in the mode of communication
Details
- Title: Subtitle
- Managerial Leadership, Truth-Telling, and Efficient Coordination
- Creators
- Jordi Brandts - Institut d'Anàlisi EconòmicaDavid J Cooper - University of Iowa, Economics
- Resource Type
- Journal article
- Publication Details
- The Economic Journal, Vol.135(670), pp.1942-1979
- DOI
- 10.1093/ej/ueaf019
- ISSN
- 0013-0133
- eISSN
- 1468-0297
- Publisher
- OXFORD UNIV PRESS
- Grant note
- National Science Foundation: SES-0214310 Spanish Ministry of Economy and Innovation: ECO2020-114251GB-I00 Severo Ochoa Program for Centers of Excellence in RD: CEX2019-000915-S Generalitat de Catalunya: 2017 SGR 1136
The authors thank the National Science Foundation (SES-0214310), the Spanish Ministry of Economy and Innovation (Grant: ECO2020-114251GB-I00), the Severo Ochoa Program for Centers of Excellence in R&D (CEX2019-000915-S) and the Generalitat de Catalunya (Grant: 2017 SGR 1136). We thank Zeina Aboushaar, Caleb Bray, Adria Bronchal, Joe Ballard, Ellis Magee, Luke Ortolani and Lavinia Piemontese for valuable help as research assistants, and seminar participants at Alaska-Anchorage, Case Western Reserve, Copenhagen Business School, Durham, East Anglia, Edinburgh, Florida State, Indiana, Lausanne, Maryland, Paderborn, Paris School of Economics, Stavanger, UCSB, Virginia, the Arne Ryde Workshop, the London Experimental Workshop and the NBER Organizational Economics Working Group for useful feedback. Finally, we also thank the editor, Amanda Friedenberg, and the anonymous reviewers for their help.
- Language
- English
- Electronic publication date
- 03/04/2025
- Date published
- 07/28/2025
- Academic Unit
- Economics
- Record Identifier
- 9984797671102771
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