A Delegation-Based Theory of Expertise

Attila Ambrus, Volodymyr Baranovskyi and Aaron Kolb

American Economic Journal: Microeconomics, 2021, vol. 13, issue 4, 373-419

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.

JEL-codes: D82 D83 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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DOI: 10.1257/mic.20190008

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