CeDEx Brown Bag Seminar - Boon Han Koh

The Brown Bag this week will be given by Boon Han Koh - visiting PhD from the University of Melbourne.

Title: Attribution biases in leadership: Is it effort or luck? - Joint with Nisvan Erkal and Lata Gangadharan.

Abstract: Leaders often have to make decisions under uncertainty. Using a controlled laboratory experiment motivated by a simple theoretical framework, we investigate followers' beliefs about the effort decisions of their leader in an environment where only outcomes are observable. We examine whether they attribute leaders' success (or failure) to effort or to luck. We consider three different leadership appointment mechanisms: imposed, random, and group assignment. Followers' beliefs respond to the leadership appointment mechanism. Moreover, the followers are biased when they update their beliefs upon observing the outcomes of their leaders' decisions. They attribute good outcomes to luck more than a Bayesian, but they respond to bad outcomes like a Bayesian. Hence, relative to the Bayesian benchmark, followers apportion leaders the same amount of blame for their failures, but they give too little credit for their successes. In addition, followers suffer from base-rate neglect in that they place too little weight on their prior beliefs as compared to a Bayesian.

Venue: A40 Sir Clive Granger, 1pm (lunch provided).