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The Expert and The Charlatan: an Experimental Study in Economic Advice

Author

Listed:
  • Aristotelis Boukouras

  • Theodore Alysandratos

  • Sotiris Georganas

  • Zacharias Maniadis

Abstract

How do people choose what economic advice to heed? We develop a set of validated multiple-choice questions on economic policy problems, to examine empirically the persuasiveness of expert versus populist advice. We define populism as advice that conforms to commonly held beliefs, even when wrong. Two (computerised) advisers suggest answers to each question, and experimental participants are incentivised to choose the most accurate adviser. Do participants choose the high-accuracy adviser (`the Expert'), or the low-accuracy one (`the Charlatan'), whose answers are designed to be similar to the modal participant's priors? Our participants overwhelmingly choose the Charlatan, and this is only slowly and partially reversed with sequential feedback on the correct answer. We develop Bayesian models to determine optimal choice benchmarks, but find that behaviour is best explained by a naive choice model akin to reinforcement learning with high inertia

Suggested Citation

  • Aristotelis Boukouras & Theodore Alysandratos & Sotiris Georganas & Zacharias Maniadis, 2020. "The Expert and The Charlatan: an Experimental Study in Economic Advice," Discussion Papers in Economics 20/06, Division of Economics, School of Business, University of Leicester.
    • Handle: RePEc:lec:leecon:20/06
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    File URL: https://www.le.ac.uk/economics/research/RePEc/lec/leecon/dp20-06.pdf
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    References listed on IDEAS

    as
    1. David Colander (ed.), 2000. "The Complexity Vision and the Teaching of Economics," Books, Edward Elgar Publishing, number 1955, June.
    2. Akerlof, George A & Dickens, William T, 1982. "The Economic Consequences of Cognitive Dissonance," American Economic Review, American Economic Association, vol. 72(3), pages 307-319, June.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Choosing charlatans
      by chris in Stumbling and Mumbling on 2021-02-13 12:55:24

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    Cited by:

    1. Bouacida, Elias & Foucart, Renaud & Jalloul, Maya, 2025. "When expert advice fails to reduce the productivity gap: Experimental evidence from chess players," Journal of Economic Behavior & Organization, Elsevier, vol. 236(C).
    2. Fries, Tilman & Barron, Kai, 2023. "Narrative Persuasion," VfS Annual Conference 2023 (Regensburg): Growth and the "sociale Frage" 277691, Verein für Socialpolitik / German Economic Association.

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    Keywords

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    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • A11 - General Economics and Teaching - - General Economics - - - Role of Economics; Role of Economists

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