A Model of Expertise
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.
|Date of creation:||11 Feb 1999|
|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.|
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