Abstract
In this paper, we propose a game theoretic formulation of P. M. Blau's argument of the “dilemma of leadership” in order to explain a paradoxical fact he observed: the supervisor surrenders some of his immediate power upon subordinates in exchange for greater “ultimate power.” We can explain the paradoxical fact by distinguishing between “power as a reward” and “bargaining power.” Through bargaining, the leader (or supervisor) decreases his power as a reward; on the other hand, he can obtain bargaining power.
