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The Perils of Friendly Oversight

Author

Listed:
  • Dino Gerardi

    (Collegio Carlo Alberto, University of Turin)

  • Edoardo Grillo

    (University of Padua)

  • Ignacio Monzón

    (Collegio Carlo Alberto, University of Turin)

Abstract

Decision makers often rely on experts’ evaluations to decide on complex proposals. Proponents want the approval of their proposals and can work to improve their quality. The scrutiny of experts ought to push proponents to work harder, leading to high-quality proposals. Experts, however, have their own agendas: they may favor or oppose the proposals under their scrutiny. We study how the expert’s agenda affects the likelihood that proposals are approved and their quality. We show that an expert in favor of a proposal can be detrimental towards its approval. This happens when it is easy to incentivize the proponent to work and when the status quo alternative is not too attractive.

Suggested Citation

  • Dino Gerardi & Edoardo Grillo & Ignacio Monzón, 2022. "The Perils of Friendly Oversight," Working Papers 122, Red Nacional de Investigadores en Economía (RedNIE).
    • Handle: RePEc:aoz:wpaper:122
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    File URL: https://rednie.eco.unc.edu.ar/files/DT/122.pdf
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    References listed on IDEAS

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    Cited by:

    1. Andrea Gallice & Edoardo Grillo, 2022. "Legitimize through Endorsement," Carlo Alberto Notebooks 680 JEL Classification: C, Collegio Carlo Alberto.
    2. Popov, Sergey V, 2022. "Tactical Refereeing and Signaling by Publishing," Cardiff Economics Working Papers E2022/14, Cardiff University, Cardiff Business School, Economics Section.

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    More about this item

    Keywords

    : information transmission; moral hazard; oversight; persuasion;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • 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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