At the Helm, Kirk or Spock? Why Even Wholly Rational Actors May Favor and Respond to Charismatic Leaders

Benjamin E. Hermalin
2014 Social Science Research Network  
Charisma is seen as a generally positive attribute for a leader to possess, yet many studies give it a "mixed report card": finding it can have little or no effect, or worse a negative effect. This paper develops a model to explain why. The key insight is that presenting the cold hard truth is often incompatible with simultaneously firing up followers-a tradeoff exists between information and inspiration. In particular, a temptation exists to hide bad news behind upbeat rhetoric. Rational
more » ... ric. Rational followers understand such appeals conceal bad news. But as long as any followers are swayed by such appeals-respond to the leader's charisma-rational followers' pessimism is tempered, and more so the more charismatic the leader. Hence, a more charismatic leader can generate better responses from all followers with an emotional appeal than can a less charismatic leader. This is a benefit to charisma. But this power has a dark side: a highly charismatic leader is tempted to substitute charm for action-she is less likely to learn relevant information and, on certain margins, works less hard herself-all to her followers' detriment. This is a heavily revised version of a paper that circulated under a similar name. The paper has benefited from the comments and suggestions of
doi:10.2139/ssrn.2419586 fatcat:7ayxy2eprfexrdoppdbuit6v5y