Using Other People's Opinions: An Experimental Study
AbstractExpert opinions are often biased. To test how such bias affects the propensity to use opinions, we set up an experiment where subjects estimate the probability of an event that depends on (i) the subject's type, which is observable, and (ii) the unobserved state of the world. Before making their estimate, one group of subjects, the clients, observe the opinion (estimate) of another subject, the expert. The expert has private information about the state, but he may be of a different type than the clients, and therefore biased. Bias is observable and easily corrected. In spite of this, we find that clients' propensity to use expert opinions is decreasing in the size of the expert's bias. This aversion to use the opinions of biased experts is not explained by computational concerns, ex-post expert informativeness or reluctance to move away from the prior.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 51787.
Date of creation: 28 Nov 2013
Date of revision:
Experiments; Probability Estimation; Biased Opinions; Naive Advice;
Find related papers by JEL classification:
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-12-06 (All new papers)
- NEP-CBE-2013-12-06 (Cognitive & Behavioural Economics)
- NEP-CTA-2013-12-06 (Contract Theory & Applications)
- NEP-EXP-2013-12-06 (Experimental Economics)
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