Asking One Too Many? Why Leaders Need to be Decisive

23 Pages Posted: 23 Oct 2012

See all articles by Junichiro Ishida

Junichiro Ishida

Osaka University - Institute of Social and Economic Research

Takashi Shimizu

Kansai University - Faculty of Economics

Date Written: October 23, 2012

Abstract

It is often touted that decisiveness is one of the most important qualities to be possessed by leaders, broadly defined. To see how and why decisiveness can be a valuable asset in organizations, we construct a model of strategic information transmission where: a decision maker solicits opinions sequentially from experts; how many experts to solicit opinions from is the decision maker's endogenous choice. We show that communication is less efficient when the decision maker is indecisive and cannot resist the temptation to ask for a second opinion. This result suggests that the optimal diversity of information sources depends critically on the strategic nature of communication: when communication is strategic, it is optimal to delegate information acquisition to a single party and rely exclusively on it; when it is not, it is optimal to diversify information sources and aggregate them via communication.

Keywords: decisiveness, cheap talk, multiple senders, commitment

JEL Classification: D23, D82

Suggested Citation

Ishida, Junichiro and Shimizu, Takashi, Asking One Too Many? Why Leaders Need to be Decisive (October 23, 2012). ISER Discussion Paper No. 857, Available at SSRN: https://ssrn.com/abstract=2165646 or http://dx.doi.org/10.2139/ssrn.2165646

Junichiro Ishida (Contact Author)

Osaka University - Institute of Social and Economic Research ( email )

6-1 Mihogaoka
Ibaraki, Osaka 567-0047
Japan

Takashi Shimizu

Kansai University - Faculty of Economics ( email )

3-3-35 Yamatecho
Suita, Osaka, 564-8680
Japan

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