A Delegation-Based Theory of Expertise
37 Pages Posted: 15 Aug 2015 Last revised: 5 Apr 2018
Date Written: February 8, 2018
We investigate 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 equilibrium experts exaggerate their biases, similarly to the winner's curse phenomenon in common value auctions. We show that having a second expert can benefit the principal, even if the two experts have the same biases or if the first expert is known to be unbiased. Our principal can benefit from commitment to randomization and prefers experts with equal rather than opposite biases, in contrast to related work.
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