Leadership Research Summary:
- Although risk decision-making plays an important role in leadership practice, the distinction in behavior between humans with differing levels of leadership, as well as the underlying neurocognitive mechanisms involved, remain unclear. In this study, the Ultimatum Game (UG) was utilized in concert with electroencephalograms (EEG) to investigate the temporal course of cognitive and emotional processes involved in economic decision-making between high and low leadership level college students.
- Behavioral results from this study found that the acceptance rates in an economic transaction, when the partner was a computer under unfair/sub unfair condition, were significantly higher than in transactions with real human partners for the low leadership group, while there was no significant difference in acceptance rates for the high leadership group.
- Results from Event-Related Potentials (ERP) analysis further indicated that there was a larger P3 amplitude in the low leadership group than in the high leadership group. The study concluded that the difference between high and low leadership groups was at least partly due to their different emotional management abilities
Leadership Research Findings:
- The study found evidence that different levels of leadership influenced the acceptance rate of offers in the UG. There was no significant difference in the acceptance rate whether the partner was human or computer when subjects were in the high leadership level category. However, the acceptance rate of low leadership subjects under computer condition was higher than when the partner was human.
- The different acceptance rates of partners can be attributed to emotional control – individuals in the high leadership group demonstrated a better ability in term of emotional inhibition, and were able to better manage negative emotions (Behrman and Perreault, 1984). Therefore, regardless of whether the partner was human or computer, students in the high level leadership group demonstrated reduced emotional reaction in the decision making process.
- By contrast, low leadership subjects appeared to lack strong emotional control ability. Therefore, when they understood that their partner was a computer, they tended to attribute the proposal more to random selection. However, when they understood that their partner was human, their decision-making behavior was potentially affected by many factors such as social factors, emotional fluctuations, etc (Sanfey et al., 2003; Rilling and Sanfey, 2011), and the unfair offer was more likely to be attributed to being man-made.
- In addition, the study found that the acceptance rate of the unfair/sub unfair offers in the computer condition was significantly higher than in the human condition in the low leadership group, while there was no significant difference in the high leadership group. That is to say, individuals with low leadership were inclined to risk preference under negative emotions in the risk decision-making task due to the lack of a strong emotional inhibition ability.