Leadership in Groups: A Monetary Policy Experiment
In an earlier paper (Blinder and Morgan, 2005), we created an experimental apparatus in which Princeton University students acted as ersatz central bankers, making monetary policy decisions both as individuals and in groups. In this study, we manipulate the size and leadership structure of monetary policy decisionmaking. We find no evidence of superior performance by groups that have designated leaders. Groups without such leaders do as well as or better than groups with well-defined leaders. Furthermore, we find rather little difference between the performance of four-person and eight-person groups; the larger groups outperform the smaller groups by a very small margin. Finally, we successfully replicate our Princeton results, at least qualitatively: Groups perform better than individuals, and they do not require more "time" to do so.
We are grateful to Jennifer Brown, Jae Seo, and Patrick Xiu for fine research assistance and to the National Science Foundation and Princeton's Center for Economic Policy Studies for financial support. We also acknowledge extremely helpful comments from Petra Geraats, Petra Gerlach-Kristen, Jens Grosser, Helmut Wagner, and seminar participants at Princeton, the International Monetary Fund, and the National Bureau of Economic Research. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.
Alan S. Blinder & John Morgan, 2008. "Leadership in Groups: A Monetary Policy Experiment," International Journal of Central Banking, International Journal of Central Banking, vol. 4(4), pages 117-150, December. citation courtesy of