Anti-herding and strategic consultation
AbstractIn this paper I analyze how careerist decision makers aggregate and use information provided by others. I find that decision makers who are motivated by reputation concerns tend to ‘anti-herding’, i.e., they excessively contradict public information such as the prior or others’ recommendations. I also find that some decision makers may deliberately act unilaterally and not consult advisers although advice is costless. Moreover, advisers to the decision maker may not report their information truthfully. Even if the advisers care only about the outcome, they bias their recommendation since they anticipate inefficient anti-herding behavior by the decision maker.
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Bibliographic InfoPaper provided by London School of Economics and Political Science in its series Open Access publications from London School of Economics and Political Science with number http://eprints.lse.ac.uk/541/.
Date of creation: Jun 2004
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Publication status: Published in European economic review (2004-06) v.48, p.503-525
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