Skip to main content
Article thumbnail
Location of Repository

Expertise and Bias in Decision Making

By Sylvain Bourjade and Bruno Jullien

Abstract

In this paper, we develop a model of a decision maker using an expert to obtain information. The expert is biased toward some favoured decision but cares also about its reputation on the market for experts. We then analyse the corresponding decision game depending on the nature of the informational linkage with the market. In the case where the expert is biased in favour of the status quo, the final decision is always biased in the same direction. Moreover, it is better to rely on experts biased against the status quo. We also show that it is optimal to publically disclose the expert report. Finally, we prove that the intuitive results that hiring an honest inside expert raises the outside expert's incentives to report truthfully holds when reports are public but not when they are secret.

Topics: D82 - Asymmetric and Private Information; Mechanism Design, L40 - General
Year: 2004
OAI identifier: oai:mpra.ub.uni-muenchen.de:7251

Suggested articles


To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.