Why Do People Give Less Weight to Advice the Further it is from Their Initial Opinion?

19 Pages Posted: 20 May 2010

See all articles by Francesco Ravazzolo

Francesco Ravazzolo

Free University of Bolzano

Øistein Røisland

Norges Bank - Department of Economics

Date Written: April 16, 2010

Abstract

Experimental studies on decision making based on advice received from others find that the weight put on the advice is negatively related to the distance between the advice and the decisionmaker's initial opinion. In this paper, we show that the distance effect can follow from rational signal extraction when the decisionmaker has imperfect knowledge about the advisor's competence. What drives the result is the assumption that the decisionmaker is better informed about her own competence than about the advisor's competence.

Keywords: Distance Effect, Policy Decision Making, Signal Extraction, Uncertainty

JEL Classification: C11, D78, D82, D83

Suggested Citation

Ravazzolo, Francesco and Røisland, Øistein, Why Do People Give Less Weight to Advice the Further it is from Their Initial Opinion? (April 16, 2010). Norges Bank Working Paper No. 2010/04. Available at SSRN: https://ssrn.com/abstract=1612297 or http://dx.doi.org/10.2139/ssrn.1612297

Francesco Ravazzolo (Contact Author)

Free University of Bolzano ( email )

Bolzano
Italy

Øistein Røisland

Norges Bank - Department of Economics ( email )

P.O. Box 1179
Oslo, N-0107
Norway
+47 22 31 67 39 (Phone)
+47 22 31 60 50 (Fax)

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