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SEQUENTIAL EXPERT ADVICE: SUPERIORITY OF CLOSED‐DOOR MEETINGS
Author(s) -
Bag Parimal K.,
Sharma Tridib
Publication year - 2019
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/iere.12407
Subject(s) - secrecy , advice (programming) , transparency (behavior) , computer science , bayesian probability , decision maker , swing , operations research , artificial intelligence , computer security , mathematics , engineering , mechanical engineering , programming language
Two career‐concerned experts sequentially give advice to a Bayesian decision maker ( D ). We find that secrecy dominates transparency, yielding superior decisions for D . Secrecy empowers the expert moving late to be pivotal more often. Further, (i) only secrecy enables the second expert to partially communicate her information and its high precision to D and swing the decision away from first expert's recommendation; (ii) if experts have high average precision, then the second expert is effective only under secrecy. These results are obtained when experts only recommend decisions. If they also report the quality of advice, fully revealing equilibrium may exist.