Other-Regarding Preferences and Leadership Styles

Abstract

We use a laboratory experiment to examine whether and to what extent other-regarding preferences of team leaders influence their leadership style in choice under risk. We find that leaders who prefer efficiency or report high levels of selfishness are more likely to exercise an autocratic leadership style by ignoring preferences of the other team members. Yet, inequity aversion has no significant impact on leadership styles. Elected leaders have a higher propensity than exogenously assigned leaders to use a democratic leadership style by reaching team consensus. Male leaders and leaders influenced by group membership tend to employ a democratic leadership style.

Keywords: leadership style, other-regarding preferences, unobserved heterogeneity

JEL Classification: C91, C92, D70, D81