Why do experts give simple advice?

Benjamin Davies

Papers from arXiv.org

Abstract: An expert tells an advisee whether to take an action that may be good or bad. He may provide a condition under which to take the action. This condition predicts whether the action is good if and only if the expert is competent. Providing the condition exposes the expert to reputational risk by allowing the advisee to learn about his competence. He trades off the accuracy benefit and reputational risk induced by providing the condition. He prefers not to provide it -- i.e., to give "simple advice" -- when his payoff is sufficiently concave in the posterior belief about his competence.

Date: 2022-09
New Economics Papers: this item is included in nep-hpe and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://arxiv.org/pdf/2209.11710 Latest version (application/pdf)

Related works:
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:arx:papers:2209.11710

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators (help@arxiv.org).