A model of expertise

V Krishna, J Morgan - The Quarterly Journal of Economics, 2001 - academic.oup.com
The Quarterly Journal of Economics, 2001academic.oup.com
We study a model in which 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 sequentially
consult two experts. We first show that there is no perfect Bayesian equilibrium in which full …
Abstract
We study a model in which 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 sequentially consult 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. Indeed, in this case full revelation may be induced in an extended debate by introducing the possibility of rebuttal.
Oxford University Press