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A Model of Expertise

  • Vijay Krishna

    (Penn State University)

  • John Morgan

    (Princeton University)

We study a model in which two perfectly informed experts offer advice to a decision maker whose actions affect the welfare of all. Experts are biased and thus may wish to pull the decision maker in different directions and to different degrees. When the decision maker consults only a single expert, the expert withholds substantial information from the decision maker. We ask whether this situation is improved by having the decision maker consult a cabinet of (two) experts. We first show that there is no perfect Bayesian equilibrium in which full revelation occurs. When both experts are biased in the same direction, it is never beneficial to consult both. In contrast, when experts are biased in opposite directions, it is always beneficial to consult both. Finally, a cabinet of extremists is of no value.

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Paper provided by EconWPA in its series Game Theory and Information with number 9902003.

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Length: 33 pages
Date of creation: 11 Feb 1999
Date of revision:
Handle: RePEc:wpa:wuwpga:9902003
Note: Type of Document - Latex using Scientific Workplace 3.0; prepared on IBM PC; to print on HP; pages: 33; figures: Three figures drawn in Latex are included in the document.
Contact details of provider: Web page: http://econwpa.repec.org

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  1. Shin Hyun Song, 1994. "The Burden of Proof in a Game of Persuasion," Journal of Economic Theory, Elsevier, vol. 64(1), pages 253-264, October.
  2. Abhijit Banerjee & Rohini Somanathan, 2001. "A Simple Model Of Voice," The Quarterly Journal of Economics, MIT Press, vol. 116(1), pages 189-227, February.
  3. Joseph Farrell., 1986. "Meaning and Credibility in Cheap-Talk Games," Economics Working Papers 8609, University of California at Berkeley.
  4. Joseph Farrell & Matthew Rabin, 1996. "Cheap Talk," Journal of Economic Perspectives, American Economic Association, vol. 10(3), pages 103-118, Summer.
  5. Jerry R. Green & Nancy L. Stokey, 1980. "A Two-Person Game of Information Transmission," Discussion Papers 418, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  6. Stephen Morris, 1999. "Political Correctness," Cowles Foundation Discussion Papers 1242, Cowles Foundation for Research in Economics, Yale University.
  7. Baliga, S. & Corchon, L.C. & Sjostrom, T., 1995. "The Theory of Implemetation when the Planner is a PLayer," Cambridge Working Papers in Economics 9512, Faculty of Economics, University of Cambridge.
  8. Steven A. Matthews & M. Okuno-Fujiwara & Andrew Postlewaite, 1990. "Refining Cheap-Talk Equilibria," Discussion Papers 892R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  9. Ezra Friedman, 1998. "Public Debate Among Experts," Discussion Papers 1234, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  10. Sobel, Joel, 1985. "A Theory of Credibility," Review of Economic Studies, Wiley Blackwell, vol. 52(4), pages 557-73, October.
  11. V. Crawford & J. Sobel, 2010. "Strategic Information Transmission," Levine's Working Paper Archive 544, David K. Levine.
  12. Morgan, J. & Stocken, P., 1998. "An Analysis of Stock Recommendations," Papers 204, Princeton, Woodrow Wilson School - Public and International Affairs.
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