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|
|Date of revision:|
|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|
References listed on IDEAS
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.:
- Morgan, J. & Stocken, P., 1998.
"An Analysis of Stock Recommendations,"
204, Princeton, Woodrow Wilson School - Public and International Affairs.
- Sobel, Joel, 1985. "A Theory of Credibility," Review of Economic Studies, Wiley Blackwell, vol. 52(4), pages 557-73, October.
- Ezra Friedman, 1998. "Public Debate Among Experts," Discussion Papers 1234, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Joseph Farrell & Matthew Rabin, 1996. "Cheap Talk," Journal of Economic Perspectives, American Economic Association, vol. 10(3), pages 103-118, Summer.
- Farrell, Joseph, 1986.
"Meaning and Credibility in Cheap-Talk Games,"
Department of Economics, Working Paper Series
qt4968n3fz, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Steven A. Matthews & M. Okuno-Fujiwara & Andrew Postlewaite, 1990.
"Refining Cheap-Talk Equilibria,"
892R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- 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.
- Baliga, Sandeep & Corchon, Luis C. & Sjostrom, Tomas, 1997. "The Theory of Implementation When the Planner Is a Player," Journal of Economic Theory, Elsevier, vol. 77(1), pages 15-33, November.
- Luis Corchón & Sandeep Baliga & Tomas Sjöström, 1995. "The Theory Of Implementation When The Planner Is A Player," Working Papers. Serie AD 1995-14, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- V. Crawford & J. Sobel, 2010.
"Strategic Information Transmission,"
Levine's Working Paper Archive
544, David K. Levine.
- Jerry R. Green & Nancy L. Stokey, 1980.
"A Two-Person Game of Information Transmission,"
418, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Stephen Morris, 2001.
Journal of Political Economy,
University of Chicago Press, vol. 109(2), pages 231-265, April.
- 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.
- Abhijit Banerjee & Rohini Somanathan, 2001. "A Simple Model Of Voice," The Quarterly Journal of Economics, MIT Press, vol. 116(1), pages 189-227, February.
When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpga:9902003. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA)
If references are entirely missing, you can add them using this form.