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The roles of reputation and transparency on the behavior of biased experts

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  • Sylvain Bourjade
  • Bruno Jullien

Abstract

We analyze situations in which an expert is biased toward some decision but cares also about his reputation in the market for experts. The information the expert reveals decreases as his bias moves toward stronger preference for the status quo. We show that it is optimal to publicly disclose both the expert's contribution and his identity. Surprisingly, revealing the intensity of the expert's bias doesn't always improve the information he reveals in equilibrium. The presence of a second expert raises the first expert's incentives to report truthfully when reports are public, but reduces them when they are secret. In particular, having an option to call another expert may be detrimental in terms of information production if reports are not public. Finally, sequential consultation of experts reduces the information obtained when reports are public, but raises it when they are secret.
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  • Sylvain Bourjade & Bruno Jullien, 2011. "The roles of reputation and transparency on the behavior of biased experts," RAND Journal of Economics, RAND Corporation, vol. 42(3), pages 575-594, September.
    • Handle: RePEc:bla:randje:v:42:y:2011:i:3:p:575-594
    DOI: j.1756-2171.2011.00146.x
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    Cited by:

    1. Yves Oytana & Nathalie Chappe, 2018. "Expert opinion in a tort litigation game," European Journal of Law and Economics, Springer, vol. 46(1), pages 67-107, August.
    2. Yves Oytana, 2014. "The Judicial Expert in a Two-Tier Hierarchy," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 170(3), pages 537-570, September.
    3. Midjord, Rune, 2012. "Competitive Pressure and Job Interview Lying: A Game Theoretical Analysis," DFAEII Working Papers 1988-088X, University of the Basque Country - Department of Foundations of Economic Analysis II.
    4. Hidir, Sinem, 2017. "Information Acquisition and Credibility in Cheap Talk," CRETA Online Discussion Paper Series 36, Centre for Research in Economic Theory and its Applications CRETA.
    5. Andina-Díaz, Ascensión & García-Martínez, José A., 2023. "Reputation and perverse transparency under two concerns," European Journal of Political Economy, Elsevier, vol. 79(C).
    6. Kim, Doyoung, 2017. "Motivating for new changes when agents have reputation concerns," Journal of Economic Behavior & Organization, Elsevier, vol. 137(C), pages 37-53.
    7. Ascensión Andina Díaz & José A. García-Martínez, 2016. "A careerist judge with two concerns," Working Papers 2016-02, Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center.
    8. Ispano, Alessandro, 2018. "Information acquisition and the value of bad news," Games and Economic Behavior, Elsevier, vol. 110(C), pages 165-173.
    9. Pavesi, Filippo & Scotti, Massimo, 2022. "Good lies," European Economic Review, Elsevier, vol. 141(C).
      • Filippo Pavesi & Massimo Scotti, 2019. "Good Lies," Working Paper Series 39, Economics Discipline Group, UTS Business School, University of Technology, Sydney.
    10. Spagnolo, Giancarlo & Decarolis, Francesco & Iossa, Elisabetta & Mollisi, Vincenzo & Giuffrida, Leonardo, 2016. "Buyer Quality and Procurement Outcomes: Explorative Evidence From the US," SITE Working Paper Series 41, Stockholm School of Economics, Stockholm Institute of Transition Economics.
    11. Killian J. McCarthy & Florian Noseleit, 2022. "Too many cooks spoil the broth: on the impact of external advisors on mergers and acquisitions," Review of Managerial Science, Springer, vol. 16(6), pages 1817-1852, August.
    12. Klein, Nicolas & Mylovanov, Tymofiy, 2017. "Will truth out?—An advisor’s quest to appear competent," Journal of Mathematical Economics, Elsevier, vol. 72(C), pages 112-121.
    13. Lukyanov, Georgy & Shamruk, Konstantin & Su, Tong & Wakrim, Ahmed, 2022. "Public communication with externalities," Games and Economic Behavior, Elsevier, vol. 136(C), pages 177-196.
    14. Kim, Doyoung, 2017. "Reputation Concerns And Authority In Organizations," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 58(2), pages 89-106, December.
    15. Bernardita Vial & Pilar Alcalde, 2020. "Intermediary Commissions in a Regulated Market with Heterogeneous Customers," Documentos de Trabajo 532, Instituto de Economia. Pontificia Universidad Católica de Chile..

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    More about this item

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

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