(Not) delegating decisions to experts: The effect of uncertainty
I construct a dynamic delegation model in which a principal can replace the agent to whom to delegate over time. Its unique feature is that the principal dynamically faces a choice between two types of agents with different multidimensional characteristics: experts with uncertain biases and non-expe...
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Veröffentlicht in: | Journal of economic theory 2020-11, Vol.190, p.105117, Article 105117 |
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Format: | Artikel |
Sprache: | eng |
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Zusammenfassung: | I construct a dynamic delegation model in which a principal can replace the agent to whom to delegate over time. Its unique feature is that the principal dynamically faces a choice between two types of agents with different multidimensional characteristics: experts with uncertain biases and non-experts with no bias. I investigate under what conditions the principal delegates to non-experts by focusing on the effect of the uncertainty regarding preference heterogeneity among experts. Its effect is different depending on the type of uncertainty: an increase in risk and in ambiguity (i.e., Knightian uncertainty) work in opposite directions with higher ambiguity rather than risk being a source of the delegation to non-experts. This analysis sheds new light on the sources of anti-elitism in politics. |
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ISSN: | 0022-0531 1095-7235 |
DOI: | 10.1016/j.jet.2020.105117 |