Herding Among Bureaucrats

Arvind Magesan

No 1153, Department of Economics - Working Papers Series from The University of Melbourne

Abstract: The herding of expert opinions is often rationalized as the outcome of social learning. However, experts are typically individuals with career concerns. As a result,herding can also arise from the fear of opposing consensus opinion and the potential career consequences of being wrong. We empirically test for social learning and career concerns using novel data on bureaucrats' expert opinions over whether to publicly provide health insurance for pharmaceuticals.We and robust evidence that career concerns are an important source of herd behavior in these policy choices. Our endings have implications for the delegation of policy-making to experts.

Keywords: Experts; Social learning; Career Concerns; Bureaucrats; Pharmaceuticals (search for similar items in EconPapers)
JEL-codes: D80 H77 I18 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2012
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Working Paper: Herding Among Bureaucrats (2012)
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