Interpersonal comparisons and concerns for expertise

Ascension Andina-Diaz and José A. García-Martínez ()
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José A. García-Martínez: Universidad Miguel Hernández

No 2020-07, Working Papers from Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center

Abstract: We study the effect of introducing interpersonal comparisons on the decisions made by career concerned experts. We consider a model with two experts, a stronger and a weaker, who face common uncertainty about the state of the world. We show that whereas full transmission of the experts' private information is an equilibrium when experts care about their absolute level of expertise, this is not necessarily the case when interpersonal comparisons matter and experts care about their relative level of expertise. In this case, we obtain that there is an equilibrium in which experts' decisions follow experts' signals only when the probability of feedback is sufficiently high. Otherwise, the stronger expert benefits from discarding her private information. In equilibrium, this expert may even completely contradict her signal and the other expert's decision. We discuss the implications of this result for reaching experts' consensus and dissent.

Keywords: Interpersonal comparisons; career concerns; probability of feedback; consensus; dissent (search for similar items in EconPapers)
JEL-codes: C72 D82 D83 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2020-11
New Economics Papers: this item is included in nep-mic
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