The Paternalistic Bias of Expert Advice

B-Tier
Journal: Journal of Economics & Management Strategy
Year: 2014
Volume: 23
Issue: 4
Pages: 876-898

Score contribution per author:

2.011 = (α=2.01 / 1 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Using a theoretical model of noisy expert advice, I show that language inflation can be a rational response to the vagueness of language. Experts will tend to overstate their positions to a like‐minded decision maker (DM) and this constitutes a Pareto improvement over sending a sincere message. When the message space is bounded, overstatement may interfere with the DM's ability to aggregate the experts' information, because communication is less precise when the same message is sent for many states of the world. Despite this, I show that experts are willing to send either the most extreme message to the DM, or a partially overstated message, because by doing so the expert can decrease the likelihood the DM makes a suboptimal decision due to his subjective interpretation of the advice. Because the expert inflates his message toward the policy he believes the DM would be better off choosing, rather than sincerely revealing his information, I refer to this behavior as a paternalistic bias.

Technical Details

RePEc Handle
repec:bla:jemstr:v:23:y:2014:i:4:p:876-898
Journal Field
Industrial Organization
Author Count
1
Added to Database
2026-01-25