5. Discussion
In this paper, we compare the performance of organizations with an in-group and an outgroup leader in terms of performance of the leader, cooperation by group members and payoffs. We found mixed evidence regarding the effect of the leader’s group membership on organizational performance.
Our results indicate that random out-group leaders were less willing to work for the group they represented, than random in-group leaders. This difference was also observed for high performance leaders in the first round but shrank and eventually reversed over 10 periods. One possible explanation for this effect could be related to the lower marginal cost that high performance leaders have compared with random leaders, which is expected to induce higher effort. However, it is also possible that high performance leaders could be inherently different from random leaders and have a higher motivation for the task, and therefore be less affected by group membership. It is also possible that the selection mechanisms changed the motivation of the leaders. High performance leaders could have perceived that they had a more legitimate claim to the position of leader, which could have fostered their motivation to work for the group members. Surprisingly, our results indicate that heterogeneous groups with an out-group leader do not necessarily produce lower contributions to the public good than homogenous groups. Despite productivity differences between in-group and out-group leaders (for random leaders), whether a group had an in-group or an out-group leader did not significantly affect the level of contributions made by the group members. This effect could be partly due to the uncertainty that group members feel regarding the effort of the leader. More research to explore this question is needed.