The roles of reputation and transparency on the behavior of biased experts
AbstractWe analyze situations in which an expert is biased toward some decision but cares also about his reputation in the market for experts. The information the expert reveals decreases as his bias moves toward stronger preference for the status quo. We show that it is optimal to publicly disclose both the expert's contribution and his identity. Surprisingly, revealing the intensity of the expert's bias doesn't always improve the information he reveals in equilibrium. The presence of a second expert raises the first expert's incentives to report truthfully when reports are public, but reduces them when they are secret. In particular, having an option to call another expert may be detrimental in terms of information production if reports are not public. Finally, sequential consultation of experts reduces the information obtained when reports are public, but raises it when they are secret.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 34813.
Date of creation: 2011
Date of revision:
Experts; Bias; Reputation;
Other versions of this item:
- Sylvain Bourjade & Bruno Jullien, 2011. "The roles of reputation and transparency on the behavior of biased experts," RAND Journal of Economics, RAND Corporation, vol. 42(3), pages 575-594, 09.
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-11-28 (All new papers)
- NEP-CTA-2011-11-28 (Contract Theory & Applications)
- NEP-HPE-2011-11-28 (History & Philosophy of Economics)
- NEP-MIC-2011-11-28 (Microeconomics)
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