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Interpersonal comparisons and concerns for expertise

Author

Listed:
  • Ascensión Andina-Díaz

    (University of Málaga)

  • José A. García-Martínez

    (Universidad Miguel Hernández)

Abstract

We study the effect of introducing interpersonal comparisons on the decisions made by career concerned experts. We consider a model with two experts, a stronger and a weaker, who face common uncertainty about the state of the world. We show that whereas full transmission of the experts' private information is an equilibrium when experts care about their absolute level of expertise, this is not necessarily the case when interpersonal comparisons matter and experts care about their relative level of expertise. In this case, we obtain that there is an equilibrium in which experts' decisions follow experts' signals only when the probability of feedback is sufficiently high. Otherwise, the stronger expert benefits from discarding her private information. In equilibrium, this expert may even completely contradict her signal and the other expert's decision. We discuss the implications of this result for reaching experts' consensus and dissent.

Suggested Citation

  • Ascensión Andina-Díaz & José A. García-Martínez, 2020. "Interpersonal comparisons and concerns for expertise," Working Papers 2020-07, Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center.
    • Handle: RePEc:mal:wpaper:2020-7
    as

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    File URL: https://theeconomics.uma.es/malagawpseries/Papers/METCwp2020-7.pdf
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    References listed on IDEAS

    as
    1. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2008. "Relative Income, Happiness, and Utility: An Explanation for the Easterlin Paradox and Other Puzzles," Journal of Economic Literature, American Economic Association, vol. 46(1), pages 95-144, March.
    2. Ottaviani, Marco & Sorensen, Peter, 2001. "Information aggregation in debate: who should speak first?," Journal of Public Economics, Elsevier, vol. 81(3), pages 393-421, September.
    3. Guillaume Roels & Xuanming Su, 2014. "Optimal Design of Social Comparison Effects: Setting Reference Groups and Reference Points," Management Science, INFORMS, vol. 60(3), pages 606-627, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Interpersonal comparisons; career concerns; probability of feedback; consensus; dissent;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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