Leadership in Dynamic Public Good Provision: Endogenous Growth and Inequality

We explore how leadership affects a dynamic public goods game. Using an experimental setting where cooperation gains can be reinvested, our findings suggest that leadership has a positive impact on final wealth of the groups. Additionally, we also observe that leadership has a positive effect on reducing inequality within groups as measured by the Gini index. Based on a sequential prisoner's dilemma, we elicit types for conditional cooperation. Our results indicate that groups work best when led by cooperatively inclined individuals. Furthermore, early contributions by the leader are crucial and yield a high return.