A Delegation-Based Theory of Expertise

49 Pages Posted: 15 Aug 2015 Last revised: 23 Nov 2020

See all articles by Attila Ambrus

Attila Ambrus

Duke University - Department of Economics

Volodymyr Baranovskyi

affiliation not provided to SSRN

Aaron Kolb

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy

Date Written: September 14, 2020

Abstract

We investigate information aggregation and 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
the focal equilibrium, experts exaggerate their biases, anticipating an
ideological winner's curse. We show that having a second expert can benefit
the principal, even when equally or more biased than the first expert. The
principal can benefit from commitment to an "element of
surprise," and prefers experts with equal rather than opposite biases.

Suggested Citation

Ambrus, Attila and Baranovskyi, Volodymyr and Kolb, Aaron, A Delegation-Based Theory of Expertise (September 14, 2020). Economic Research Initiatives at Duke (ERID) Working Paper No. 193, Kelley School of Business Research Paper No. 2020-70, Available at SSRN: https://ssrn.com/abstract=2643672 or http://dx.doi.org/10.2139/ssrn.2643672

Attila Ambrus (Contact Author)

Duke University - Department of Economics ( email )

100 Fuqua Drive
Durham, NC 27708-0204
United States

Volodymyr Baranovskyi

affiliation not provided to SSRN

Aaron Kolb

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy ( email )

Bloomington, IN 47405
United States

HOME PAGE: http://https://sites.google.com/site/aaronmkolb/

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