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A Delegation-Based Theory of Expertise

Author

Listed:
  • Attila Ambrus
  • Volodymyr Baranovskyi
  • Aaron Kolb

Abstract

We investigate information aggregation and competition in a delegation framework. An uninformed principal is unable to perform a task herself and must choose between one of two biased and imperfectly informed experts. In the focal equilibrium, experts exaggerate their biases, anticipating an ideological winner's curse. We show that having a second expert can benefit the principal, even when equally or more biased than the first expert. The principal can benefit from commitment to an "element of surprise" and prefers experts with equal rather than opposite biases.

Suggested Citation

  • Attila Ambrus & Volodymyr Baranovskyi & Aaron Kolb, 2021. "A Delegation-Based Theory of Expertise," American Economic Journal: Microeconomics, American Economic Association, vol. 13(4), pages 373-419, November.
    • Handle: RePEc:aea:aejmic:v:13:y:2021:i:4:p:373-419
    DOI: 10.1257/mic.20190008
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    Citations

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    Cited by:

    1. Daniel Habermacher, 2022. "Information Aggregation in Multidimensional Cheap Talk," Working Papers 169, Red Nacional de Investigadores en Economía (RedNIE).
    2. Manuel Foerster & Daniel Habermacher, 2023. "Policy-advising Competition and Endogenous Lobbies," Working Papers 229, Red Nacional de Investigadores en Economía (RedNIE).

    More about this item

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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