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(Not) delegating decisions to experts: The effect of uncertainty

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  • Kishishita, Daiki

Abstract

I construct a dynamic delegation model in which a principal can replace the agent to whom to delegate over time. Its unique feature is that the principal dynamically faces a choice between two types of agents with different multidimensional characteristics: experts with uncertain biases and non-experts with no bias. I investigate under what conditions the principal delegates to non-experts by focusing on the effect of the uncertainty regarding preference heterogeneity among experts. Its effect is different depending on the type of uncertainty: an increase in risk and in ambiguity (i.e., Knightian uncertainty) work in opposite directions with higher ambiguity rather than risk being a source of the delegation to non-experts. This analysis sheds new light on the sources of anti-elitism in politics.

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  • Kishishita, Daiki, 2020. "(Not) delegating decisions to experts: The effect of uncertainty," Journal of Economic Theory, Elsevier, vol. 190(C).
    • Handle: RePEc:eee:jetheo:v:190:y:2020:i:c:s0022053120301101
    DOI: 10.1016/j.jet.2020.105117
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    Cited by:

    1. Kishishita, Daiki & Yamagishi, Atsushi, 2021. "Contagion of populist extremism," Journal of Public Economics, Elsevier, vol. 193(C).

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    More about this item

    Keywords

    Dynamic delegation; Experts; Agency problems; Ambiguity; Populism;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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