How Experts Decide: Identifying Preferences versus Signals from Policy Decisions

Stephen Hansen and Michael McMahon

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: A large theoretical literature assumes that experts di ffer in terms of preferences and the distribution of their private signals, but the empirical literature to date has not separately identi ed them. This paper proposes a novel way of doing so by relating the probability a member chooses a particular policy decision to the prior belief that it is correct. We then apply this methodology to study diff erences between internal and external members on the Bank of England's Monetary Policy Committee. Using a variety of proxies for the prior, we provide evidence that they di ffer significantly on both dimensions.

Keywords: Bayesian decision making; committees; monetary policy (search for similar items in EconPapers)
JEL-codes: D81 D82 E52 (search for similar items in EconPapers)
Date: 2011-07
New Economics Papers: this item is included in nep-cba and nep-cdm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Working Paper: How Experts Decide: Identifying Preferences versus Signals from Policy Decisions (2011)
Working Paper: How experts decide: identifying preferences versus signals from policy decisions (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp1063

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