Decision Rules for Experts with Opposing Interests
AbstractThis paper studies optimal decision rules for a decision maker who can consult two experts in an environment without monetary payments. This extends the previous work by Holmstr�m (1984) and Alonso and Matouschek (2008) who consider environments with one expert. In order to derive optimal decision rules, we prove a "constant-threat" result that states that any out-of-equilibrium pair of recommendations by the experts are punished with an action that is independent of their reports. A particular property of an optimal decision rule is that it is simple and constant for a large set of experts' preferences and distribution of their private information. Hence, it is robust in the sense that it is not affected by errors in specifying these features of the environment. By contrast, the constructions of optimal outcomes absent commitment or with only one expert are sensitive to model details.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Queen Mary, University of London, School of Economics and Finance in its series Working Papers with number 674.
Date of creation: Nov 2010
Date of revision:
Communication; Information; Noise; Experts; Constant threat;
Find related papers by 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, and Information
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-12-04 (All new papers)
- NEP-CDM-2010-12-04 (Collective Decision-Making)
- NEP-CTA-2010-12-04 (Contract Theory & Applications)
- NEP-GTH-2010-12-04 (Game Theory)
- NEP-MIC-2010-12-04 (Microeconomics)
- NEP-UPT-2010-12-04 (Utility Models & Prospect Theory)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mark Armstrong & John Vickers, 2010.
"A Model of Delegated Project Choice,"
Econometric Society, vol. 78(1), pages 213-244, 01.
- Marco Battaglini, 2004. "Policy Advice with Imperfectly Informed Experts," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 0(1), pages 1.
- Vijay Krishna & John Morgan, 2008.
"Contracting for information under imperfect commitment,"
RAND Journal of Economics,
RAND Corporation, vol. 39(4), pages 905-925.
- Krishna, Vijay & Morgan, John, 2004. "Contracting for Information under Imperfect Commitment," Competition Policy Center, Working Paper Series qt4010c6w9, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
- Vijay Krishna & John Morgan, 2005. "Contracting for Information under Imperfect Commitment," Microeconomics 0504006, EconWPA.
- Marco Battaglini, 2002.
"Multiple Referrals and Multidimensional Cheap Talk,"
Econometric Society, vol. 70(4), pages 1379-1401, July.
- Marco Battaglini, 1999. "Multiple Referrals and Multidimensional Cheap Talk," Discussion Papers 1295, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Marco Battaglini, 2000. "Multiple Referrals and Multidimensional Cheap Talk," Econometric Society World Congress 2000 Contributed Papers 1557, Econometric Society.
- Board, Oliver J. & Blume, Andreas & Kawamura, Kohei, 2007.
Econometric Society, vol. 2(4), December.
- Goltsman, Maria & Hörner, Johannes & Pavlov, Gregory & Squintani, Francesco, 2009. "Mediation, arbitration and negotiation," Journal of Economic Theory, Elsevier, vol. 144(4), pages 1397-1420, July.
- Martimort, David & Semenov, Aggey, 2006.
"Continuity in Mechanism Design without Transfers,"
Open Access publications from University of Toulouse 1 Capitole
http://neeo.univ-tlse1.fr, University of Toulouse 1 Capitole.
- repec:ebl:ecbull:v:3:y:2008:i:63:p:1-8 is not listed on IDEAS
- Gilat Levy & Ronny Razin, 2007. "On the Limits of Communication in Multidimensional Cheap Talk: A Comment," Econometrica, Econometric Society, vol. 75(3), pages 885-893, 05.
- Bester, Helmut & Krahmer, Daniel, 2007.
"Delegation and Incentives,"
CEPR Discussion Papers
6042, C.E.P.R. Discussion Papers.
- Kovác, Eugen & Mylovanov, Tymofiy, 2009. "Stochastic mechanisms in settings without monetary transfers: The regular case," Journal of Economic Theory, Elsevier, vol. 144(4), pages 1373-1395, July.
- repec:bla:restud:v:75:y:2008:i:1:p:259-293 is not listed on IDEAS
- Takahashi, Satoru & Ambrus, Attila, 2008.
"Multi-Sender Cheap Talk with Restricted State Spaces,"
3200263, Harvard University Department of Economics.
- Ambrus, Attila & Takahashi, Satoru, 2008. "Multi-sender cheap talk with restricted state spaces," Theoretical Economics, Econometric Society, vol. 3(1), March.
- Wolinsky, Asher, 2002.
"Eliciting information from multiple experts,"
Games and Economic Behavior,
Elsevier, vol. 41(1), pages 141-160, October.
- Robert J Aumann, 1999. "Agreeing to Disagree," Levine's Working Paper Archive 512, David K. Levine.
- V. Crawford & J. Sobel, 2010.
"Strategic Information Transmission,"
Levine's Working Paper Archive
544, David K. Levine.
- Ehud Kalai & Robert W. Rosenthal, 1976. "Arbitration of Two-Party Disputes Under Ignorance," Discussion Papers 215, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Li Hao & Wing Suen, 2009. "Viewpoint: Decision-making in committees," Canadian Journal of Economics, Canadian Economics Association, vol. 42(2), pages 359-392, May.
- Dessein, Wouter, 2002. "Authority and Communication in Organizations," Review of Economic Studies, Wiley Blackwell, vol. 69(4), pages 811-38, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Nick Vriend).
If references are entirely missing, you can add them using this form.