Too good to be truthful: Why competent advisers are fired
Christoph Schottmüller
No 16-10, Discussion Papers from University of Copenhagen. Department of Economics
Abstract:
A decision maker repeatedly asks an adviser for advice. The adviser is either competent or incompetent and his preferences are not perfectly aligned with the decision maker's preferences. Over time the decision maker learns about the adviser's type and fires him if he is likely to be incompetent. If the adviser's reputation for being competent improves, it is more attractive for him to push his own agenda because he is less likely to be fired for incompetence. Consequently, competent advisers are also fired with positive probability. Firing is least likely if the decision maker is unsure about the adviser's type.
Keywords: advice; cheap talk; reputation (search for similar items in EconPapers)
JEL-codes: C73 D83 G24 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2016-09-12
New Economics Papers: this item is included in nep-gth, nep-hpe, nep-lab, nep-mic and nep-sog
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)
Downloads: (external link)
http://www.econ.ku.dk/english/research/publications/wp/dp_2016/1610.pdf (application/pdf)
Related works:
Journal Article: Too good to be truthful: Why competent advisers are fired (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:kud:kuiedp:1610
Access Statistics for this paper
More papers in Discussion Papers from University of Copenhagen. Department of Economics Oester Farimagsgade 5, Building 26, DK-1353 Copenhagen K., Denmark. Contact information at EDIRC.
Bibliographic data for series maintained by Thomas Hoffmann (thho@kb.dk).