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Ascribing Leadership for Solving Coordination Problems with Asymmetric Information
Abstract
Coordination problems can be solved by designating a leader whose decisions others follow. However, this solution creates a second-order coordination problem: who should lead and who should follow? We investigate the decision to follow in coordination games where one player has supplementary information about which strategy yields which payoff. We varied whether this information was relevant for maximizing benefits and whether players' interests were fully aligned. Participants chose to adopt the follower role when their partner had relevant information and their interests were aligned. Asymmetric information further served as a focal point for coordinating on who should lead even when the supplementary knowledge was irrelevant to payoff maximization, with knowledgeable individuals emerging as leaders. Surprisingly, participants chose to follow even when their informed partner could potentially use their private information to the follower's detriment.