Leading by Example to Protect the Environment: Do the Costs of Leading Matter?

CentER Discussion Paper Series No. 2011-043

43 Pages Posted: 16 Apr 2011 Last revised: 30 Apr 2011

See all articles by Erling Moxnes

Erling Moxnes

Foundation for Research in Economics and Business Administration (SNF)

Eline van der Heijden

Tilburg University, CentER

Date Written: March 14, 2011

Abstract

Environmentalists often urge their home countries to take a leading role in reducing global environmental problems like climate change. A pertinent question is: will examples set by leading nations influence others to follow suit, and if so, do the costs of leading matter? For instance, will costly domestic reductions have a stronger effect on followers than purchases of cheap emission permits abroad? To investigate these questions we have conducted two treatments in a public bad experiment in which leaders have different costs of leading. Our findings suggest that higher costs of leading lead to stronger effects of a given leader example. Randomly chosen leaders lead by example and set better examples if it is less costly to do so. Finally, there seems to be a limit to the leader effect and it may decrease over time.

Keywords: experiment, leadership, public bad, climate change

JEL Classification: C92, H41, Q50

Suggested Citation

Moxnes, Erling and van der Heijden, Eline, Leading by Example to Protect the Environment: Do the Costs of Leading Matter? (March 14, 2011). CentER Discussion Paper Series No. 2011-043, Available at SSRN: https://ssrn.com/abstract=1809773 or http://dx.doi.org/10.2139/ssrn.1809773

Erling Moxnes

Foundation for Research in Economics and Business Administration (SNF) ( email )

Breiviksveien 40
Bergen, N-5045
Norway

Eline Van der Heijden (Contact Author)

Tilburg University, CentER ( email )

P.O. Box 90153
Department of Economics
5000 LE Tilburg
Netherlands

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